{"id":28962,"date":"2023-08-29T03:22:17","date_gmt":"2023-08-29T03:22:17","guid":{"rendered":"https:\/\/tata-blog.osian.dev\/blog\/?p=28962"},"modified":"2024-11-22T15:24:05","modified_gmt":"2024-11-22T09:54:05","slug":"personal-loan-vs-loan-against-ppf-which-one-to-choose","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/personal-use-loan\/personal-loan-vs-loan-against-ppf-which-one-to-choose\/","title":{"rendered":"Personal Loan Vs Loan Against PPF &#8211; Which One To Choose"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Introduction<\/strong><\/h2>\n\n\n\n<p>Most individuals plan their finances by investing in some form. There may come a time when an individual may require extra monetary help. This might be due to unforeseen expenses or some emergency. In such situations, taking a loan might be unavoidable. This often happens when investments aren\u2019t liquid or are insufficient to cover the fund requirement.<\/p>\n\n\n\n<p>Most employed professionals have a PPF account that holds their savings accumulated over many years of employment. This is often considered an option to cover emergency fund shortages instead of taking a loan. However, withdrawing funds from a PPF account also comes with its limitations. Let us consider a head-to-head comparison &#8211; Personal Loan vs. PPF.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is PPF (Public Provident Fund)?<\/strong><\/h2>\n\n\n\n<p>The Public Provident Fund scheme was launched in 1968. Individuals can save effectively through this scheme while enjoying a good rate of interest. This scheme also comes with tax benefits for the investor. It is an ideal investment avenue for salaried people and helps them build a corpus for retirement.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Some key features of PPF<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A person can open a PPF account with a small amount as low as Rs. 100, and investments of up to Rs. 1.5 lakh in a year are exempt from income tax (under section 80C).<\/li>\n\n\n\n<li>PPF accounts have a lock-in period of 15 years, which can be extended for five years. Partial withdrawals can be made if required.<\/li>\n\n\n\n<li>The amount can be deposited in any form, such as cash, cheque, online transfer, or demand draft.<\/li>\n\n\n\n<li>Premature closure is possible only after five years for a valid reason like money required for education, wedding, or hospitalisation.<\/li>\n\n\n\n<li>PPF accounts can be opened in a child&#8217;s name. When the child turns 18, the money gets transferred to them.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Loan against PPF<\/strong><\/h3>\n\n\n\n<p>Personal loans can be taken against a PPF account at competitive rates of interest. The following points should be kept in mind while applying for a loan against a PPF account &#8211;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Loans can be taken between the 3rd and the 6th year of opening a PPF account and must be repaid within three years.<\/li>\n\n\n\n<li>One can avail 25% of the investment value as a personal loan against a PPF account.<\/li>\n\n\n\n<li>If the need for a second loan arises, it is compulsory to clear the previous loan first.<\/li>\n\n\n\n<li>The interest rate of a loan against a PPF account will be 2% more than the interest rate of the PPF account. It is a fixed interest rate and will not change till the tenure ends.<\/li>\n\n\n\n<li>If the account holder defaults in repayment within three years, the interest rate would rise to 6% more than the interest rate of the PPF account.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Benefits of taking a loan against PPF<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A loan against a PPF account doesn\u2019t require any other collateral or mortgage.<\/li>\n\n\n\n<li>One can repay it within three years from the date it was availed.<\/li>\n\n\n\n<li>Repayments can be made in two or more instalments. The amount can also be repaid as a lump sum.<\/li>\n\n\n\n<li>The interest rate on such loans is much lesser than the interest rate offered by banks for personal loans.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are Personal Loans?<\/strong><\/h2>\n\n\n\n<p>Whenever someone needs monetary assistance, one of the easiest ways to meet the requirement is to take a personal loan. It is an unsecured loan offered by a bank depending on one&#8217;s credibility. In return, banks charge an interest rate on personal loans, which is higher than an education or a home loan. The different types of loans in this category are wedding, travel, pension, etc. The amount offered by banks as a personal loan ranges from Rs. 50,000 to Rs. 25 Lakh, and the tenure is usually seven years.<\/p>\n\n\n\n<p>Getting approval for a personal loan online is easy with immediate bank disbursement. Most banks offer this facility.<\/p>\n\n\n\n<p>The following steps need to be followed to get an instant <a href=\"https:\/\/tata-blog.osian.dev\/personal-loan.html\">personal loan<\/a> from Tata Capital:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Enter details like your name, mobile number, and PAN number and verify them.<\/li>\n\n\n\n<li>Enter the loan amount, and if pre-approved, enter the sanctioned amount.<\/li>\n\n\n\n<li>Enter personal details like age, profession, salary, etc., and banking details like account number, bank name, IFSC, etc.<\/li>\n\n\n\n<li>Set up an e-mandate. Complete this with a one-time authorisation.<\/li>\n\n\n\n<li>Specify if any additional facility is needed, like an insurance cover for the personal loan.<\/li>\n\n\n\n<li>Accept the e-agreement after verifying the personal loan details. The loan will get disbursed immediately.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Documents required for availing a personal loan:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Photo ID proof, such as an Aadhaar card, driving licence, passport, or voter ID.<\/li>\n\n\n\n<li>A copy of salary slips for the last three months.<\/li>\n\n\n\n<li>Bank statement for the last six months.<\/li>\n\n\n\n<li>Address proof, like an electricity bill, ration card, passport, or Aadhaar card.<\/li>\n\n\n\n<li>The employment certificate stating you have been working in the organisation for the past one year.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Personal loan vs PPF<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The requirements for a personal loan include having a good credit score, appropriate applicant age, and a regular income. On the other hand, a PPF loan can be taken between the 3rd and 6th year of opening the PPF account.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>There is no maximum ceiling on taking a personal loan, whereas, for a PPF loan, 25% of the investment can be availed.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest rates are comparatively high for personal loans, whereas PPF loans have an interest rate of 1% more than the prevailing PPF interest rates.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Personal loan tenure is usually 6 to 7 years, whereas a PPF loan has to be repaid within three years.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h4>\n\n\n\n<p>To sum up, if one requires a big amount with a flexible repayment tenure, then a personal loan is a good option. On the other hand, if a small amount is needed for a short period, it is better to go with a loan against PPF.<\/p>\n\n\n\n<p>Opt for the most optimum loan that fits your needs with Tata Capital\u2019s wide range of personal loan options at attractive interest rates and enjoy a quick, hassle-free disbursement.<\/p>\n\n\n\n<p>To explore more about personal loans and loans against PPF, download Tata Capital&#8217;s <a href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.snapwork.tcl&amp;hl=en\">Instant Loan App.<\/a><\/p>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-499968f5 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/tata-blog.osian.dev\/online\/loans\/personal-loans\/apply-now-personal-loan#! \">Apply for Personal Loan<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Introduction Most individuals plan their finances by investing in some form. There may come a time when an individual may require extra monetary help. This might be due to unforeseen expenses or some emergency. In such situations, taking a loan might be unavoidable. This often happens when investments aren\u2019t liquid or are insufficient to cover [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":28963,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-28962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-use-loan"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Personal Loan Vs Loan Against PPF - Which One To Choose | Tata Capital<\/title>\n<meta name=\"description\" content=\"There Might Be Some Due Unforeseen Expenses Or Some Emergency In Which An Individual Needs To Avail Loan. Let Us Consider A Head-To-Head Comparison - Personal Loan Vs Loan Against PPF In This Blog From Tata Capital!\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Personal Loan Vs Loan Against PPF - Which One To Choose | Tata Capital\" \/>\n<meta property=\"og:description\" content=\"There Might Be Some Due Unforeseen Expenses Or Some Emergency In Which An Individual Needs To Avail Loan. 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