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Loan Against PPF.

Loan Against PPF

Interest Rate For Loan Against PPF ( Public Provident Fund ) Account Is Chargeable At 10.6% p.a

You can avail loans against your PPF (Public Provident Fund) account provided certain conditions are fulfilled.

  • First, your PPF account should be active and must have completed a financial year from the date of initial subscription.
  • Second, you can apply for the loan only before the expiry of 5 fiscal years.

For instance, let us say you made the initial subscription in a PPF account in August 2012, i.e. in the financial year 2012-13. That fiscal year ends in March 2013. Your PPF account should have completed one financial year, i.e. from March 2013 to March 2014. So, you can avail a loan only after March 2014 and March 2018.

Once the loan is fully repaid, you can opt for a second loan but only before the expiry of 5 fiscal years, i.e. before March 2017 in the above example.

How much loan amount can you get against your PPF account?

You can apply for a loan amount of up to a maximum of 25% of the balance left in your account at the end of that financial year which would be 2 years before the end of fiscal year when the loan was applied.

For instance, if you apply for a loan in December 2012, that fiscal year would end in March 2013. Two years before that is 2011, so you would get 25% of the balance in your account at the end of March 2011.

So if you apply for a loan in the third fiscal year, you can avail a maximum of 25% of the balance in your account at the end of the first fiscal year and if you apply in the fourth year, the balance at the end of the second financial year is considered.

Effective Interest Rate For Loan Against PPF account

Earlier, the interest on the loan against PPF was 1% more than the interest rate on PPF account which used to be 8%. But as per the recent amendment made by the Government, the interest rate on PPF was increased to 8.6%. Also, the rate of interest on loan against PPF was raised to 2% more than the interest rate on PPF as opposed to the earlier 1%. So the interest rate for the loan would be 2% more than 8.6%, i.e. the effective interest rate is 10.6% .
(The revised rate of interest of 2% more than PPF interest is charged on the loans which are taken after 30.11.2011.)

Things To Consider For Repayment of the loan Taken Against PPF Account

The repayment of the loan taken against your PPF account must be done in 36 months. You have the option to pay the principal amount and interest separately, either in a lump sum or in two or more monthly installments within the time period of 36 months.

In case you are unable to repay the full principal amount before the expiry of the prescribed tenure, the interest rate on the balance loan amount would be increased to 6% more than the interest rate you receive on your PPF. If you have not paid the interest completely but repaid the principal, then the remaining interest would be deducted from your PPF account.

Responses (21)

  1. krish
    March 29, 2017 at 4:45 pm · Reply

    Sir, i have EPF account ,I completed 3 working years, now I have 40000 in my pf account ,iam eligible or not taken lone, suppose eligible how much money get loan

  2. Vinoth s
    January 26, 2017 at 7:14 pm · Reply

    Need to withdraw my pf money ..working in Infosys limited pf has started since 37 months.current balance amount is 1.5 lacs.need loan against pf.

    • Pradeep Daram
      January 29, 2017 at 4:18 pm · Reply

      You want to withdraw your PF or, you need loan against your PF?

    September 17, 2015 at 3:28 am · Reply

    sir my owner not signature in my withdrawal form please suggest for withdrawal P.F.

    • Pradeep Daram
      September 26, 2015 at 3:24 pm · Reply

      I don’t understand what do you meant my ‘owner’. Do you mean to say your employer?

    September 15, 2015 at 5:11 am · Reply


    • Pradeep Daram
      November 9, 2015 at 9:47 am · Reply

      PF officers only can guide you better on this. The source in which you have applied for loan against your PPF account

  5. ani
    July 26, 2015 at 2:04 am · Reply

    sir if I forgot my epf signature so how to get my epf lone

    • Pradeep Daram
      August 14, 2015 at 6:33 am · Reply

      No idea. I don’t think, its possible . Because, it has to match your signature.

  6. ani
    July 26, 2015 at 2:03 am · Reply

    sir when I fill up epf opening form so mistakenly I doing a signature to other place but epf office accept of my form nd do not alert me nd not cancel my form then if I apply to epf lone so can I get

    • Pradeep Daram
      August 14, 2015 at 6:34 am · Reply

      As long as signature matches, doesn’t matter 🙂 I hope.

  7. rupesh shah
    March 31, 2015 at 12:19 pm · Reply

    i need loan against PF account is it possible

    • Pradeep Daram
      April 4, 2015 at 3:39 pm · Reply

      Yes, it is possible to take loan against PPF. Please go thru the article for more information.

  8. Jilani Basha
    March 11, 2015 at 5:06 am · Reply

    how to get the loan against PPF if I am eligible for it, to whom we need to contact?

  9. somnath bagul
    January 16, 2015 at 2:56 pm · Reply

    I want to loan on pf but my pf account is on salary based may i eligible to loan pl guide

    • Pradeep Daram
      January 20, 2015 at 12:39 pm · Reply

      You can get loan against your PF account only after completion of 5 years.It doesn’t matter weather it is salary or whatsoever. Please let me know if you need more details about loan against your PF account

  10. Subir Banik
    January 3, 2015 at 1:31 pm · Reply

    Dear sir,

    I Subir Banik inform you that, My father is a serviceman in bank sector. He had 4-5 year left to be retire. Recently he applied for an “EPFLoan” and it sanctioned for my elder brother’s marriage. Now the marriage has been cancelled. The loan amount is nearly 4Lac.

    1) So is there any chance to cancel the loan and refund it.
    2) Is there is any situation to refund it with any penalty interest.
    3) Can I simply keep the money for my brotrhers marriage later.
    4) Is there any chance of imprisonmaent.

    But the bank have signed my father in a “NRW7” form which says i can refund it with “.interest at a rate fixed by the fund”.

    So please let me know how much interest I need to pay to refund the money as I have 15 days left to complete one month of the loan taken. And I still did not spend any money. I know there is documentation on upon this. But it will be better for me to understand if you give me a quick view by answering me these question.

    Please give me your good advice as early as possible. I am eagarly waiting for your suggestion.

    Thanks & Regards

    • Pradeep Daram
      January 20, 2015 at 12:47 pm · Reply

      Yes.You can close ( not cancel ) your loan by paying full principal amount along with the interest amount. Interest will be charged only for the duration you had loan amount. I think, current interest rate for the loan taken against PPF is 10.6% per annum.

  11. k sreenivasu
    September 15, 2014 at 10:46 am · Reply

    Is there any difference between PPF AND EPF or not ; I have balance in epf

    • Pradeep Daram
      September 24, 2014 at 5:47 am · Reply

      EPF stands for Employee Provident Fund. This will be applicable only for salaried employees. As part of employee benefit, company gives one EPF account deposit some money in it. This is not applicable for individuals.
      PPF stands for Public Provident Fund. Central government created an entity to benefit the individuals. Anybody can invest some money in PPF for their own retirement. PPF gives decent returns with attractive interest rates. Anybody, including salaried employees can use this for their retirement.

      To know more about PPF accounts, go through the link below:

      Please feel free to ask if you have any more questions.

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