Apart from investment benefits, PPF can also be used to raise money during any financial emergency. Investors can avail loans against this investment avenue. Maximum 25% of the loan amount for the second year immediately after the loan application year
Public Provident Fund (PPF), a government-approved investment scheme, is considered better for retirees. It has an initial lock-in period of 15 years. Apart from investment benefits, PPF can also be used to raise money during any financial emergency. Investors can avail loans against this investment avenue.
When can you take loan against PPF
PPF account holders can take loan after the expiry of one year from the end of the financial year in which the initial subscription was made. Loans can be taken in 2021-22 for accounts opened during 2019-20. The loan can be taken before the expiry of five years.
How much loan amount can be taken
The loan amount can be maximum 25% of the second year immediately following the loan application year.
How many times loan can be taken against PPF
Loan can be taken only once in a financial year. The second loan cannot be obtained until the first loan is repaid.
what is interest rate
If the loan is repaid within 36 months taken, the interest rate of the loan is applicable at 1 per cent per annum. If the loan is repaid after 36 months from the date of availing the loan, an interest rate of 6 per cent per annum is applicable from the date of loan.
Under what circumstances the loan will not be available
Loan/withdrawal facility is not available on closed accounts.
What are the benefits of loan against PPF
The loan interest rates on PPF account are lowest as compared to personal loans of other banks.
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