Individuals can take a loan against the balance in their Public Provident Fund, or PPF, account. However, this facility is only permitted between the third and sixth year.

The amount is restricted to 25% of the balance at the end of the second year preceding the year in which the loan is applied for. For example, if the loan was applied in 2015-16, the amount permitted as a loan would be 25% of the account balance at the end of 2013-14.

The rate of interest is 2% over and above the rate being earned on the PPF account. So if the rate of interest is 8.8%, then the interest on the loan amount is 10.8%.

The loan has to be paid back in 36 months. If the account holder fails to do so, the interest shoots up from 2% to 6%, over and above the rate being earned.