The Public Provident Fund (PPF) is not just a long-term savings option but also allows you to take a loan against your balance. Many investors compare this with a regular personal loan to decide which option is better during emergencies. Here’s a complete comparison of Loan Against PPF vs Personal Loan.
Example: If your balance was ₹2 lakh at the end of FY 2022, you can take up to 25% = ₹50,000 loan in FY 2024.
Example: If you take a ₹50,000 personal loan at 14% interest for 3 years, your EMI will be ~₹1,707, and total interest paid will be ~₹11,500.
| Feature | Loan Against PPF | Personal Loan |
|---|---|---|
| Eligibility | Available from 3rd to 6th year of PPF | Based on income & credit score |
| Loan Amount | Up to 25% of PPF balance (end of 2nd year) | Depends on salary, profile, credit history |
| Interest Rate | PPF rate + 1% (currently ~8.1%) | 10% to 20% (varies by bank/NBFC) |
| Tenure | Up to 36 months | 12 to 60 months |
| Credit Score Needed | No | Yes |
| Processing Time | Linked to PPF account, quick approval | Quick disbursal but requires checks |
| Penalty | Higher interest (PPF + 2%) if default | Late payment fees & higher interest |
| Account Status | PPF account continues | Not linked to savings scheme |
| Best For | Small, short-term needs | Larger amounts and longer tenure |
In short: PPF loan is cheaper but limited. Personal loan is costlier but flexible.
A loan against PPF is a loan you take using your PPF account balance as security. It’s allowed only between the 3rd and 6th year of opening your PPF account.
A personal loan is an unsecured loan. You don’t need to give any asset or investment as security. Approval depends on your income, credit score, and repayment capacity.
Loan against PPF usually has a much lower interest rate.
So yes, PPF loan is clearly cheaper.
It depends.
No. You can take it only from the 3rd year till the end of the 6th year from the date you opened the PPF account.
After that, loans are not allowed only withdrawals.
Yes, slightly.
Yes.
If you already have a PPF account, the PPF loan is often the smarter first option.
Yes, both loans are multipurpose. There are no restrictions on how you use the money.
Choose Loan Against PPF if:
Choose Personal Loan if:
The Public Provident Fund (PPF) is not just a long-term savings option but also allows you to take a loan against your balance. Many investors compare this with a regular personal loan to decide which option is better during emergencies. Here’s a complete comparison of Loan Against PPF vs Personal Loan.
Example: If your balance was ₹2 lakh at the end of FY 2022, you can take up to 25% = ₹50,000 loan in FY 2024.
Example: If you take a ₹50,000 personal loan at 14% interest for 3 years, your EMI will be ~₹1,707, and total interest paid will be ~₹11,500.
| Feature | Loan Against PPF | Personal Loan |
|---|---|---|
| Eligibility | Available from 3rd to 6th year of PPF | Based on income & credit score |
| Loan Amount | Up to 25% of PPF balance (end of 2nd year) | Depends on salary, profile, credit history |
| Interest Rate | PPF rate + 1% (currently ~8.1%) | 10% to 20% (varies by bank/NBFC) |
| Tenure | Up to 36 months | 12 to 60 months |
| Credit Score Needed | No | Yes |
| Processing Time | Linked to PPF account, quick approval | Quick disbursal but requires checks |
| Penalty | Higher interest (PPF + 2%) if default | Late payment fees & higher interest |
| Account Status | PPF account continues | Not linked to savings scheme |
| Best For | Small, short-term needs | Larger amounts and longer tenure |
In short: PPF loan is cheaper but limited. Personal loan is costlier but flexible.
A loan against PPF is a loan you take using your PPF account balance as security. It’s allowed only between the 3rd and 6th year of opening your PPF account.
A personal loan is an unsecured loan. You don’t need to give any asset or investment as security. Approval depends on your income, credit score, and repayment capacity.
Loan against PPF usually has a much lower interest rate.
So yes, PPF loan is clearly cheaper.
It depends.
No. You can take it only from the 3rd year till the end of the 6th year from the date you opened the PPF account.
After that, loans are not allowed only withdrawals.
Yes, slightly.
Yes.
If you already have a PPF account, the PPF loan is often the smarter first option.
Yes, both loans are multipurpose. There are no restrictions on how you use the money.
Choose Loan Against PPF if:
Choose Personal Loan if:
