PPF account will help you get short-term mortgage at 1% rate of interest – defined
2 min readLoan Against PPF: Public Provident Fund or PPF account is not only an investment-cum-tax-saving instrument. During monetary emergency, it may be used as an avenue for fund raiser as nicely. As per the PPF mortgage guidelines, an account holder can get mortgage towards PPF account from third to sixth yr of PPF account opening and the PPF mortgage rate of interest is simply 1 per cent.
Speaking on mortgage towards PPF SEBI registered tax and funding professional Jitendra Solanki stated, “A PPF account holder can get loan against its PPF account from 3rd to 6th years of account opening. In this period, if a PPF account holder comes under any kind of financial stress, then PPF account can be a good option to raise fund by using the PPF loan option. Most interestingly, interest rate on loan against PPF is only 1 per cent.”
Speaking on the PPF mortgage guidelines Manikaran Singhal, Founder at goodmoneying.com stated, “Loan against PPF is short-term loan in nature. It can be taken for a maximum period of 36 months means the loan against PPF has to be repaid within 36 months.”
Singhal stated that in the course of the mortgage reimbursement, the mortgage quantity taken as mortgage will get deducted whereas PPF curiosity calculation. Mean if a PPF account holder has ₹1 lakh in PPF account and the mortgage taken is ₹1 lakh. In that case the PPF curiosity might be counted on ₹50,000 stability until the mortgage towards PPF is repaid. Currently, PPF rate of interest is 7.1 per cent for April to June 2021 quarter.
On failing to repay mortgage towards PPF account by 36 months Solanki stated that the rate of interest will develop into 6 per cent maintaining remainder of the norms relevant until the mortgage is totally repaid.
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