Here are the rules for taking a loan against your PPF account.
• PPF account holders can only take a loan between the third and sixth financial year of opening the PPF account.
For example, if Mr. A opened a PPF account in January 2010,
• Year 1: April 2009 – March 2010 (Account opened within this timeframe – in January 2010).
• Year 2: April 2010 – March 2011.
• Year 3: April 2011 – March 2012. (Can take a loan starting from this year)
• Year 4: April 2012 – March 2013.
• Year 5: April 2013 – March 2014.
• Year 6: April 2014 – March 2015. (Can take a loan only up to this year, as next year will qualify for partial withdrawals)
• Year 7: April 2015 – April 2016 (Mr. A can begin withdrawing from his PPF account from this date).
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.
Considering the above example, if Mr. A wishes to take a loan as soon as he is legally allowed to do so, his maximum loan capacity will be 25% of the balance as on March 2010.
Loans must be repaid within 36 months of when they were taken. Any loan exceeding the 36 month repayment period will be charged interest at 6% more than the earning interest rate.
Need fund urgently? Click here to apply for a Personal Loan.