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Loan against PPF account
It can be availed any time after expiry of one year from the end of the year in which the initial subscription was made but before expiry of 5 years from the end of the year in which the initial subscription was made i.e. the loan facility is available from third to sixth financial year of opening the account but only maximum 25% of the balance at the end of the second financial year preceding the year in which the loan was applied for. Loan cannot be availed after the end of the 6th financial year after the account was opened. Any collateral or mortgage is not required to avail the loan.
Following table would help you understand the calculation of yearly loan amount that can be availed from 3rd to 6th year:
Loan Against PPF Account
| Year | Amount Deposited | Opening Balance | Starting Balance | Interest Earned | Closing Balance | Loan | Withdrawal |
|---|---|---|---|---|---|---|---|
| 1 | 100000 | 108100.00 | 8100.00 | 108100.00 | |||
| 2 | 100000 | 108100.00 | 208100.00 | 16856.10 | 224956.10 | ||
| 3 | 100000 | 224956.10 | 324956.10 | 26321.44 | 351277.54 | 27025.00 | |
| 4 | 100000 | 351277.54 | 451277.54 | 36553.48 | 487831.03 | 56239.03 | |
| 5 | 100000 | 487831.03 | 587831.03 | 47614.31 | 635445.34 | 87819.39 | |
| 6 | 100000 | 635445.34 | 735445.34 | 59571.07 | 795016.41 | 121957.76 | |
| 7 | 100000 | 795016.41 | 895016.41 | 72496.33 | 967512.74 | 175638.77 | |
| 8 | 100000 | 967512.74 | 1067512.74 | 86468.53 | 1153981.27 | 243915.51 | |
| 9 | 100000 | 1153981.27 | 1253981.27 | 101572.48 | 1355553.75 | 317722.67 | |
| 10 | 100000 | 1355553.75 | 1455553.75 | 117899.85 | 1573453.61 | 397508.21 |
In the above table, we have made calculations considering that Rs 1,00,000/- has been deposited in each financial year on/before 5th April of respective year. The rate of interest is taken as 8.1% which is the prevailing rate in PPF account.
If you have availed a loan against your PPF account, you are required to pay this amount either in 36 instalments (in 3 years) or in lump sum as you wish to. The rate of interest is 2% per annum on the loan amount.
If you are unable to pay your loan instalments on time, you will be charged an interest on the pending loan amount which is 6 % higher than what you are receiving on your PPF account.