A PPF account holder is allowed to raise a loan against PPF starting from the third financial year. But the loan facility is available till the sixth financial year. For example, if a subscriber has opened the PPF account in the financial year 2018-19 then the first loan can be taken against from 2020-2021. But the amount of loan should not exceed 25% of the balance available in PPF account. Form D is required to be submitted to avail the loan facilities. Interest charged on the loan against PPF is 2% higher than the existing rates on PPF Account. For example, if the rate of interest is 8% then the interest rate on the loans will be 10%.
If the PPF account is opened on the name of a minor, the guardian can apply for a loan on its behalf. For this, they would have to submit a certificate to the account’s office on his behalf. The PPF account holder will get the loan again when the previous loan is repaid with the loan interest. If you have not paid the full amount of the loan including the interest, the new loan will not be granted. A PPF holder can take only one loan a year.
