Want To Avail Loan Against PPF Account? Here's Your Step Wise Guide
All subscribers of PPF are eligible for these loans. (Photo Credit : Representative Image )
PPF accounts are considered to be one of the most prominent modes of savings as they give financial assistance to post-retirement schemes and plans. The money from PPF accounts can be withdrawal without even the competition of maturity period. It also gives to facility to apply for loan on the PPF account itself. It allows the subscribers to take personal loans against the available balance in the account at a competitive interest rate. This becomes beneficial for those who want to apply for short-term loans without pledging any asset as collateral.
Here are significant features of taking a loan against PPF account:
- All subscribers of PPF are eligible for these loans.
- To avail loan, the account should be at least one year old. So, for example, if an account was opened during the financial year 2016-17, then a loan can be availed from 1 April 2018. The loan can be taken till the end of the financial year 2021-2022.
- The loan amount is capped at 25% of the balance at the end of the second financial year preceding the year in which the loan was applied for. No interest is given on the money withdrawn as loan from the PPF account.
- Moreover, interest is charged at 2% more than the interest earned on the balance in the PPF account.
- The interest rate gets hiked to 6% more than the interest earned on the PPF balance if the loan against the PPF account is not paid off within 36 months.
- A second loan on the loan on the PPF account can not be availed until the first one gets paid-off completely.
Tuesday, November 19, 2019 02:18 PM