Top 5 Benefits of loan Against PPF Account

Planning to take personal loan to finance your money need? Do you know that you can take loan against your PPF account balance as well? Do you know that loan against PPF is considered as the cheapest personal loan in India?

In this article, I will share 5 awesome Benefits of loan Against PPF which will simply open up the door of hope for you in case you are not aware about this before. Just to make things clear, this loan is only for those people who are operating an PPF account with sufficient balance. The amount of loan you will get is 25% of the PPF account balance.

Top 5 Benefits of loan Against PPF Balance

Interest rate: The best part about this loan is the interest rate. Most of the time what matters in any kind loan is what is the interest rate with which you have to repay the loan against PPF account. In case of Personal loan, you might have to settle down with 14% – 15%, but in case of PPF account you will pay only 2% extra interest rate. That means, the current interest rate of PPF account is 8.7%, so the loan against PPF account can be availed @ 10.7% only. For more accurate information please contact your bank.

Guarantee: You don’t need to mortgage anything while approaching a loan against PPF account.

Fix Repayment Period: Personally I always like this feature in loan. Whenever there is a high repayment period in loan like in case of Home loan, people tend to choose that only to save on EMI. But never realized that they are paying huge interest amount in long run. In case of loan against PPF, the tenure is fixed up to 3 years or 36 months.

No Penalty for Late Payment: In most cases, if you are not able to the pay the EMI in time, you may have to pay some penalty. In case PPF account loan, if you don’t pay the interest amount in due time, bank will automatically deduct the interest amount from your existing PPF account at the end of financial year. But in case the loan is not paid by 36 months, then get ready to pay extra 6% interest rate.

Fear of Recovery: PPF is a Govt body, so no such fear of recovery agency in case you have not repaid the installments in time. Although there are some clauses which I have shared before which will make the road more tougher for you if don’t close the loan in 36 months.

So, you should consider your PPF account first if you are planning to take personal loan. But make sure that you have enough PPF balance so that you can get your desired loan amount. Otherwise, there is no point in discussing the benefits of loan against PPF account over Personal loan.


I am a passionate blogger and personal finance enthusiast. Mostly share about investment tips, insurance guide, banking how to guides and various personal finance hacks through my blog. Checkout my first YouTube Channel on Personal Finance Guide.

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