Government Employees Loan: Government employees get a special facility of loan during their job. In this, neither interest is charged from them nor is there any need to return this money. The withdrawal rule is also so simple that the money reaches your account as soon as you give an application.
New Delhi. Government employees are given a special facility of loan along with many facilities during their employment. Almost every government employee takes advantage of this facility during his job. The most important thing in this is that you get complete freedom to repay the loan and no interest is charged on it. Now you must be wondering which is the scheme which provides loan facility without interest.
Actually, before the year 2004, General Provident Fund (GPF) account was opened for those doing government jobs. In this account, a certain amount was deducted every month from the employee’s salary and deposited, which was available as per requirement during retirement or job. The biggest feature of this account is that the employee does not have to pay interest on the amount withdrawn from it. However, after the implementation of the New Pension Scheme (NPS) from 2004, opening of GPF accounts for government employees has stopped.
Rule of deposit in GPF account
Every month, 6 percent of the basic and DA salary of a government employee is deposited in the GPF account. This is the minimum amount, while a maximum of 100 percent can also be deposited. In a way, this money is deposited for the future. Interest is also available on this every year from the government. Currently, the annual interest on GPF is 7.1 percent, which keeps changing every quarter.
How much money can you take as loan?
Before GPF, loan could be taken up to 75 percent of the total amount deposited in the account. In the year 2021, the government imposed a limit on this and gave the facility to withdraw only 10 percent to 50 percent of the amount. However, later its limit was changed back to 90 percent. The limit for withdrawal of money is decided on the basis of the total service period of the employee. However, no matter how long the loan is taken, the employee is not required to pay interest on it.
Two types of loans are available
Two types of loans can be taken from GPF. If 15 years of employment have passed then the employee can take a permanent loan, in which a maximum of 75 percent and in some cases 90 percent of the amount can be withdrawn. There is no interest charged on this and if you have less than 10 years left for retirement, there is no need to return this money. This means that if you are eligible then you should pay the EMI, otherwise recovery will not be made from you.
Temporary loan is given to employees with less than 15 years of service. In this also, 75 percent of the total deposited amount and in some cases 90 percent can be withdrawn. Interest is not charged on this also, but it is necessary to return the money withdrawn in 24 equal installments.
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