You can get a loan on ppf balance at 1%. should you go for it?

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Coleman Schoen asked a question: You can get a loan on ppf balance at 1%. should you go for it?
Asked By: Coleman Schoen
Date created: Thu, Apr 8, 2021 1:04 PM
Date updated: Wed, Sep 28, 2022 10:23 PM

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Top best answers to the question «You can get a loan on ppf balance at 1%. should you go for it»

Therefore, your effective rate of interest on PPF loan amount will be 7.1% plus 1%… It is way cheaper than a personal loan which can range from 12-18% per annum.

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In case the loan against the PPF account is not paid off within 36 months, the applicable interest rate will be hiked to 6% more than the interest earned on the PPF balance (instead of the additional 1% interest rate charged normally). If the principal is repaid within the loan tenure, but there is a portion of the interest amount that remains ...

Interest Rate: The interest rate for a loan against PPF has been fixed at 1% over the interest earned on the balance. Since the current rate of interest on PPF is 7.1% per annum, you will have to...

Your PPF account balance can banish your money crisis; loan offer at just 1 per cent interest rate PPF Account: During any kind of financial crisis an account holder can take loan from one's Public Provident Fund Account against the PPF balance accumulated during the investment period. View in App

At one percent, the interest rate on such a loan is much cheaper than any other type of loan. However, experts advise against taking a loan against one's PPF account. Reason number one is that fact that you will lose out on the tax exempt interest amount that you earn on your PPF.

The loan amount is capped at a maximum of 25 per cent of the balance available at the close of two years immediately preceding the year in which the loan is being applied for. Say, you apply for the loan any day during the FY 2017 -18 then you will be eligible for the 25 per cent of the balance in your account as on March 31, 2016.

The loan is capped at 25% of the balance at the end of year previous year. It costs 1% per year and has to be repaid within three years. Till a loan is repaid, an investor cannot take further loans. 4. Don't skip investing or put too much in PPF in a year You must contribute at least Rs 500 and at most Rs 1.5 lakh in your PPF account in a year.

You deposit Rs 50,000 on 2 nd You PPF account balance now is Rs 3.5 lac. Between 5 th and 31 st August, the minimum balance in your PPF account was Rs 3.5 lac. So your monthly interest calculation on PPF account will be on Rs 3.5 lac. That is (8%/12 * Rs 3.5 lac) = Rs 2333; PPF investing AFTER 5 th of Month. PPF rate applicable is the same as above at 8%.

Therefore, your actual cost of loan will be rate of interest on PPF that you forgo plus 1%. As the PPF interest rates are revised on a quarterly basis, the government has recently notified the PPF...

Loan against PPF account. You can get a loan against your PPF balance from the third year and till the sixth year after opening the PPF account. The amount of loan is limited to 25% of the balance that stood in the PPF account at the end of 2nd year or the year preceding the year in which the loan has been applied.

If an individual is eligible for a Rs 50,000 loan from the PPF account subject to other conditions, then interest on the loan will be charged at the rate of 1 percent per annum. Remember only the interest rate payable on loan taken from PPF account has been revised. Other things have not changed.

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