This post tries to answer any query which you have regarding loan on Public Provident fund
When Can I apply For a PPF Loan?
A PPF subscriber is allowed to take a loan from the third financial year. And this loan facility against the PPF account is available only till the end of the sixth financial year. For example, if a PPF account was opened in 2017-18, the first loan can be taken only from 2019-20. A PPF subscriber cannot take a new loan until the old loan has been paid off.
How much amount can I get as Quantum of Loan?
But the loan amount cannot exceed 25% of the balance available in the PPF account at the close of two years immediately preceding the year in which the loan is being applied for. For example, if a PPF account has a closing balance of Rs 2,00,000 in 2017-18, The maximum loan quantum can be Rs 50,000 only
How many times can loan facility be availed in a year?
A loan can be taken only once in a year even though the loan taken in the year is repaid in the same year.
What are the documents that are to be submitted for loan and what will be the Interest charged?
A PPF subscriber needs to submit Form D for a loan request. Interest is charged at 2% over the PPF interest rate. And the loan taken from the PPF account has to be repaid within 36 months
Which banks Provide Loan against PPF Facilties?
All Scheduled Commercial banks provide Loan against PPF Facilties. To name a few
- State Bank Of India
- Punjab National Bank
- Bank Of Baroda
- HDFC Bank
- ICICI Bank
What If my tenure of 6 years of PPF have been completed?
You cannot avail loan facility against PPF any more but you can withdraw the corpus as per existing knorms. To know more about redemption read here.
What is the penalty if i fail to repay PPF loan on time ?
If the loan is not repaid within the prescribed period of thirty six months, interest on the amount of loan outstanding shall be charged at six per cent per annum instead of at two per cent per annum.
My Bank asks me to get personal loan Instead of PPF loan What should I Do?
Most of the bank offer PPF loan always try and get PPF loan as the interest charged against PPF loan is 2-3% less than the Personal loan