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How to
Get a Loan Against PPF Account: Complete Guide
The Public
Provident Fund (PPF) is one of the safest long-term investment options in
India, offering guaranteed returns, tax benefits, and a lock-in period of 15
years. But did you know you can also get a loan against your PPF account
balance?
This
facility is especially useful if you need funds for short-term needs without
disturbing your long-term investment. At IndiaLends, we aim to simplify your
financial decisions—whether you’re applying for a personal
loan or leveraging your PPF account.
Here’s
everything you need to know about taking a loan against PPF account.
Eligibility
for Loan Against PPF
|
Criteria |
Rule |
|
Account
Type |
Available
for both self and minor accounts |
|
Time
Period |
Loan can
be availed from 3rd year up to 6th year of PPF account |
|
Number of
Loans |
Only one
loan can be taken at a time |
|
Repayment |
Must be
repaid within 36 months |
|
Interest
Rate |
1% higher
than prevailing PPF interest rate |
👉 For official scheme rules, visit the
India
Post PPF scheme page.
How Much
Loan Can You Avail Against PPF?
The loan
amount is up to 25% of the balance at the end of the 2nd year preceding
the year of loan application.
Example:
How to
Apply for a Loan Against PPF Account
1.
Visit
the bank or post office branch where your PPF account is held.
2.
Fill
out Form D (Application for loan against PPF).
3.
Submit
required documents (ID proof, PPF passbook).
4.
The
amount will be disbursed directly to your bank account.
5.
Repay
in lump sum or installments within 36 months.
Repayment
Rules
👉 If loan is not repaid on time, it is
charged at 6% higher than prevailing PPF interest rate.
Matrix-Driven
Guide: Loan vs. Partial Withdrawal in PPF
|
Feature |
Loan
Against PPF |
Partial
Withdrawal |
|
When
Available |
3rd to 6th
year |
After 7th
year |
|
Maximum
Amount |
25% of 2nd
year balance |
50% of
balance |
|
Repayment |
Required
(within 36 months) |
Not
applicable |
|
Interest |
1% above
PPF rate |
No
interest |
|
Purpose |
Short-term
liquidity |
Long-term
needs |
IndiaLends
Insight
Taking a loan
against your PPF account is a smart way to get short-term funds without
liquidating your investments. However, the amount is limited and only available
in early years.
If you need larger
funding or longer tenure, you can explore instant
personal loans from IndiaLends—with flexible EMIs, higher eligibility, and
quick approval.
Frequently
Asked Questions (FAQs)
1. Can I
take multiple loans against my PPF account?
You can take only one loan at a time. Another loan is allowed only after full
repayment of the first.
2. Can I
take a loan against PPF after 6 years?
No. After the 6th year, only partial withdrawals are allowed, not loans.
3. Is the
loan against PPF taxable?
No. The loan amount is not taxable since it’s borrowed against your own
savings.
4. Can I
get a loan against my child’s PPF account?
Yes. A guardian can apply for a loan against a minor’s PPF account.
5. What
happens if I don’t repay the loan?
Default leads to a higher penalty—6% above PPF interest rate.
Apply Now
Need funds
without breaking your savings? Apply for a loan against your PPF account
at your nearest post office or bank branch.
Looking for
higher amounts and longer tenures? Get an instant
personal loan from IndiaLends with minimal documentation and quick
approval.
