Solid arrangement of cheap loan, money will be easily arranged when needed... You will also get a good amount of time to repay the loan.
People fulfill their need for money in an emergency either by borrowing money from someone or by completing their work with the help of credit cards, personal loans, etc. Here know the way by which you can get a cheap loan and you can easily fulfill your need for money.
Anyone can face an emergency and in such a situation, money is needed the most. People fulfill their need for money either by borrowing money from someone or by completing their work with the help of credit cards, personal loans, etc. A personal loan fulfills your need, but in return, you have to pay a lot of interest. On the other hand, if you have taken the help of a credit card and are not able to repay the amount in the grace period, then also you may have to pay a good amount of interest.
In such a situation, the facility of a PPF loan can be very helpful for you. The government provides a loan facility on the Public Provident Fund. Compared to a personal loan, it is quite cheap and there is a good amount of time to repay it. But only those people can avail this facility who have invested in PPF. Let us tell you some special things related to the loan available on PPF.
Benefits of loan on PPF and interest rate
If you avail loan facility on PPF at the time of need, then you get two benefits. The first benefit is that for this loan, you do not have to mortgage gold or property as security because this loan is given to you based on the amount deposited in the PPF account. The second benefit is that its interest rate is better than any unsecured loan. According to the rules, the interest rate of a PPF loan is only 1% more than the interest rate of a PPF account. That is, if you are taking 7.1% interest on a PPF account, then you will have to pay 8.1% interest on taking a loan.
You get ample time to repay
You get ample time to repay the loan taken against PPF. It has to be repaid within 36 months i.e. maximum of three years. You can repay the PPF loan in two ways - first, you can repay it in lump sum and the second way is to repay it in installments. If you are unable to repay the loan within 36 months, then as a penalty, you will have to repay the loan at an interest rate 6 percent higher than the interest received on PPF. First of all, you have to repay the principal amount of the loan. Later, the interest is calculated according to the payment period.
How much loan can you take?
Keep in mind that the facility of loan against PPF is available only to those whose account is at least 1 year old. You can take up to 25 percent of the amount deposited in your PPF account as a loan. Suppose your PPF account is three years old and you have deposited Rs 3 lakh in this account at the rate of Rs 1 lakh per annum, then you can take 25 percent of 3 lakh i.e. Rs 75,000 as a loan.
The loan facility will not be available after 5 years.
If your PPF account has completed five years, then you will not get the loan facility because after this you get the facility of partial withdrawal from the account. One more thing to understand is that you can take a loan on a PPF account only once. Even if you have repaid the previous loan on time, you still do not get the loan facility on this account again.
How to apply
To avail of the loan facility on PPF, you will have to go to the branch of the bank or post office in which the PPF account is opened, fill out the form, and apply for the loan. Form D is used for this in SBI. Along with this, the loan amount and the period for repayment will have to be written in an application. If you have taken any loans before this, you will have to mention it as well. After this, you will have to submit the PPF passbook. After the whole process, the loan gets approved within about a week.
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