How can you avail a loan?
A loan can only be taken after the expiry of one fiscal year from the end of the fiscal year in which the initial subscription was made and before the expiry of five fiscals from the end of the fiscal year in which the initial subscription was made.
For instance, suppose you made the initial subscription in a PPF account in November 2011 fiscal year 201112), you can avail a loan only after March 2013 and before March 2017.
How much you can get?
You can avail a loan amount of up to a maximum of 25% of the balance in your account at the end of the second year immediately preceding the year in which the loan is applied for.
So if you apply for the loan in the third fiscal year, you can avail a maximum of 25% of the balance available at the end of the first fiscal year.
If you opt for a loan in the fourth year, the balance at the end of the second fiscal year would be considered. Effective interest rate In past, you can get a loan against PPF at an interest rate of 1% above the rate you receive on PPF. So till the time you are getting 8% on your PPF, the loan will be available at a rate of 9% per annum.
As per the recent decision by the government, the rates for PPF will be revised to 8.6% for the current fiscal. Also, the government decided to raise the loan rate to 2% above the rate you receive on PPF.
So the effective rate for the loan would go up to 10.6%.