You can meet the need for money in Diwali shopping by taking a loan on PPF account, find out the details

 Talk of work: You can meet the need for money in Diwali shopping by taking a loan on PPF account, find out the details

Loans can be taken on PPF account for a maximum of 3 years

Your PPF (Public Provident Fund) account can meet your money needs in Diwali shopping. Loans can be taken at an interest rate of only 1% on PPF to meet your personal need. Today we will introduce you to the facility of loan available on PPF.

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When and how much loan can be taken on PPF account?

You can also take a loan on your PPF account. You can take a loan from PPF from 1 year after the end of the current financial year till the end of the fifth year.

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Understanding this time period, if you have opened a PPF account in January 2017, you can take a loan from 1 April 2019 to 31 March 2023. As per the post office rule, if you are going to apply for a loan this Diwali, you can get a loan up to a maximum of 25% of the deposit till March 31, 2020.

Only 1% interest rate

Extra 1% interest has to be paid on interest earned on PPF account. In order to take a loan on PPF, the principal amount of the loan has to be repaid first. Then interest has to be paid. The original amount can be paid in installments of 2 or more.

Interest on the principal amount can be paid in 2 monthly installments. If you pay the principal amount in a limited time period but the interest is still a little, it is deducted from your PPF account.

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Time limit

Loans can be taken on PPF account for a maximum of 3 years. The loan has to be repaid within this time limit. This loan can be taken once in a year. Another loan can be taken only after repaying the loan amount taken once.

If the loan is not repaid ....

If the loan is not repaid or partially repaid within 36 months, an interest of 6% per annum will be charged on the increased loan amount. This means that an interest rate of 6% will be applicable on non-payment of loan instead of 1% interest rate.

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This is how a loan can be taken

You can apply for a loan with your PPF account at a bank or post office. For this you have to provide some documents apart from PPF account documents and Aadhaar card. Click here for more information about this.