How to Take a Loan Against NSC?

Loan Against National Savings Certificate

You can get 2 types of loans: A flat loan An overdraft loan

What is a Flat Loan?

The type of loan in which the total interest that the borrower pays is decided at the very beginning based on the total principal amount.

What is an Overdraft Loan?

The overdraft facility allows you to borrow money even when your account has insufficient funds to cover the withdrawal amount.


The tenure of the loan against National Saving Certificate equals the maturity of your investment in the scheme.

Quantum of the Loan

Banks can provide loans up to 70-90% of NSC value, with longer-held NSCs (3 years) yielding maximum loan amounts & shorter-term NSCs yielding less.

Interest Rates

Interest rates are usually lower than traditional loans. Most banks charges an interest around Base Rate + 4% to  Base Rate + 7%.

Who is Eligible?

An Indian citizen Age: 18 - 75 years

How to Avail Loan Against NSC?

Step 1: Collect the NC 41 Form from the post office, fill it up & submit it. The form should be signed by the pledgee & pledger.

How to Avail Loan Against NSC?

Step 2: After submission, the post office will mark the pledge on the NSC as per its rules.

How to Avail Loan Against NSC?

Step 3: The concerned officer will write “Transferred security to…”  on your NSC in red ink below the postmaster’s dated signature.

How to Avail Loan Against NSC?

Step 4:  Pay the stipulated fees to the post office for verifying & releasing the pledge.

How to Avail Loan Against NSC?

Step 5: Once the bank receives the certificates duly marked as pledged by the post office, it will release the loan to you.

Documents Required

ID proof Income Proof Photographs Original National Savings Certificate

NSC: Attractive Loan Collateral

The interest rate on the loan amount drawn against an NSC is generally lower than the interest charged on personal loans.