How to avail Loan from your Public Provident Fund (PPF) Account

A subscriber or investor of public provident fund, can avail loan facility between 3rd financial year to 6th financial year i.e. from the third financial year up to end of fifth financial year.

Loan from your public provident fund account can be availed by applying in Form D or in a form near thereto together with the PPF passbook.

The maximum loan that can be availed from your public provident fund account is up to 25 % of the amount that stood to your credit at the end of the second year.

On receipt of application under public provident fund scheme the concern person may after satisfying himself that the amount of loan applied for is not in excess of the limit prescribed and that the applicant has, till the date of application, been subscribing according to the limit specified may sanction it and enter the amount in your public provident fund pass book.

Loan From Public Provident Fund AccountWhere the application is made by a person who has made subscriptions to the public provident fund on behalf of a minor of whom he is the guardian, he shall furnish a certificate in the following form, namely:-

‘Certified that the amount for which loan is applied for is required for the use of ……. Who is alive and is still a minor.”

The principal amount of a loan under the public provident fund Scheme shall be repaid by you before the expiry of 36 months from the first day of the month following the month in which its sanctioned.

The repayment may be made either in one lump sum or in two or more monthly installments within the prescribed period of thirty six months. The repayment will be credited to your account.

After the principal is fully repaid, you should pay interest thereon in not more than two monthly installments at the rate of 1 % per annum for the period commencing from the first day of the month following the month in which the loan is drawn up to the last day of the month in which the last installment is paid.

Provided that where the loan is repaid, only in part within the prescribed period of thirty six months, interest on outstanding shall be charged at 6% per year instead of at one per cent per year from the first day of the month following the month in which the loan was obtained to the last day of the month in which it is finally repaid.

Now you know how to avail loan from your public provident fund (PPF) account. We request you to give your feedback and suggestion on this.

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