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Government Employees Loan: A Special Facility for Government Employees

New Delhi. Government employees are provided with a unique advantage of accessing loans during their employment, with no interest charged and flexible repayment options. This scheme, known as the General Provident Fund (GPF) account, was introduced before the year 2004 and allowed for a certain amount to be deducted monthly from the employee’s salary for future use.

The GPF account has been a popular choice among government employees due to its interest-free withdrawal feature. Although the opening of GPF accounts for government employees ceased after the implementation of the New Pension Scheme (NPS) in 2004, those with existing accounts continue to benefit from this unique loan facility. The GPF account accrues an annual interest rate of 7.1 percent, which is subject to change quarterly.

Government employees can withdraw a percentage of their total GPF account balance, with the limit initially reduced in 2021 but later reinstated to allow for a withdrawal of up to 90 percent. This limit is determined based on the employee’s total service period. The GPF account offers two types of loans: permanent and temporary. A permanent loan can be obtained after 15 years of service, allowing for a maximum withdrawal of 75 to 90 percent with no interest charged. For those with less than 10 years left until retirement, repayment is not required. Temporary loans, available to employees with less than 15 years of service, also allow for a maximum withdrawal of 75 to 90 percent with no interest charged, but repayment in 24 equal installments is mandatory.

The GPF account has been a valuable resource for government employees seeking financial assistance without the burden of interest payments. This historic loan facility continues to provide crucial support to government workers, ensuring financial stability and security during their employment.

Overall, the GPF account stands as a testament to the government’s commitment to its employees’ well-being and financial security, offering a unique and beneficial loan facility that remains an essential aspect of government employment. With no interest charged and flexible withdrawal options, the GPF account is a valuable resource for government employees seeking financial assistance.