Frequently Asked Questions
Education Loan
What are the Loans for?
The loan is for member’s self education and education of their children.
Who can avail Loans?
Members who have contributed for at least 3 years.
How much can I borrow ( Max. Amt.) ?
Maximum limit of loan is Nu.1000,000/-provided the Provident Fund, immovable collaterals and repayment capacity are sufficient
For how long can I borrow?
Loan can be availed for a maximum of 15 years.
How many loan accounts can I hold at a time?
Only one account per member can be held at a time. However, the member can avail new loans during the period of his service provided earlier loans are liquated and the client has a clear credit record.
Additional loans on the existing loan can be availed provided the client has enough collateral and repayment capacity and the amount is within the maximum limit.
Where can I apply for the loan?
Processing of the loan is done at the Head Office, Thimphu at the moment.
What documents do I need to avail the loan?
Loan documents should be fully completed as per the checklist given below:
  • Application Form.
  • Two passport size photographs of the applicant.
  • Citizenship Identity Card copy.
  • 3 years in service
  • Initial Appointment Letter copy.
  • Latest Pay Slip.
  • I.D Card Copy of the Applicants’ beneficiary.
  • Two copies of passport size photographs of the beneficiary.
  • Proof of Admission in the school/college/university and Institution.
  • Financial Institutions Clearance:(BNB/BOB/BDFC/RICB)[Incase borrower wishes to mortgage land & building as secondary collateral]
  • Marriage Certificate and I.D Card Copy of the spouse if the property is registered in the name of Spouse or if the spouse wishes to mortgage the Accumulated PF balance.
    • How long will it take to process the loan?
    One day, provided all required documents are completed and received by NPPF.
    What are the processing fees charged by the NPPF?
    A very nominal processing fee of Nu.300 is charged for any new loan.
    What is EMI? How is it calculated?
    EMI stands for Equated Monthly Installments. The installment comprises both principal  and interest components. Your EMI would be calculated depending on the tenor you  choose, to repay your loan. The EMI would be higher if you choose to repay within a  shorter period as against a longer-term loan. A shorter repayment period, however, reduces your interest cost over the term of the loan.
    How can I repay?
    The repayment of EMI is done directly from the salary and deposited into the NPPF account maintained in Bank of Bhutan and its branches by your department.
    Can I prepay the loan? Are there any penalties?
    Yes, you can prepay the loan at any stage. There are no penalties charged for the prepayment.
    What is the method of calculation of interest and penelty?
    Interest on loans is calculated quarterly on simple daily method on the outstanding principal and charged at the end of each quarter @10% P.a.
    Penalty is charged if an installment has not been paid within 20 days from the due date. Penal interest is calculated from the date the installment is due, not the expiry of the grace period. Penel interest is calculated and added to the outstanding interest figure at the end of each quarter @5% P.a.
    How can I get access to updated information on my loan balance?

    You can visit our website www.nppf.org.bt or send e-mail to us on any enquiry to invest@druknet.bt.The NPPF will also e-mail the information to you provided you have submitted your e-mail address to the NPPF.
    Why is my loan account not updated immediately? / Why NPPF takes time to punch the EMI in my loan account?
    All deposits made from monthly salary or cash deposit are received by the two authorized banks, BoB and BNB. These deposits are confirmed by the banks on a monthly basis. After such deposits are confirmed by the banks, the accounts are credited back dated with effect from the date NPPF received the repayments into its accounts. However, upon request by clients in cases of liquidation, NPPF confirms individual deposits with the bank and updates such deposits immediately.
    Housing Loan
    What are the Loans for?
    Housing loan for construction, repairs, purchase and transfer of loan from other FIS for residential purpose.
    Who can avail Loans?
    Members who have contributed for at least 5 years.
    How much can I borrow ( Max. Amt.) ?
    Maximum limit for urban housing loan is Nu.10,000,000/-provided the collaterals and repayment capacity are enough .
    Maximum Limit for rural housing loan is Nu.10,000,000/- condition that the 50% of collaterals and Provident Fund balance is enough to cover the loan amount. The repayment capacity should be within 60% of the net pay.
    Note: Any amount above Nu.10,000,000/- has to be approved by the National Pension Board.
    For how long can I borrow?
    Housing Loan can be availed for a maximum of 20 years.
    How many loan accounts can I hold at a time?
    A member can hold any number of loan accounts at a time, provided he has sufficient collateral, repayment capacity and a clear credit record. However, if the total of all loan accounts exceed 10 million, any additional loan has to be approved by the Board.
    Where can I apply for the loan?
    Processing of the loan is done at the Head Office, Thimphu at the moment.
    What documents do I need to avail the loans?
    Loan documents should be fully completed as per the checklist given below:
    Loan documents should be fully completed as per the checklist given below:
  • Application Form.
  • Two passport size photographs of the applicant.
  • Citizenship Identity Card copy.
  • 5 years in service
  • Ownership Certificate of Land
  • Recent photograph of the building for repairs, renovation and extension or photograph of plinth level construction for new construction.
  • Insurance certificate of the building.
  • Loan Clearance Certificates (BNB/BOB/BDFC/RICB).
  • Approved drawings and Plans.
  • Estimated Value of building for construction, repairs, renovation & extension.
  • Approval from respective Authorities.
  • Departmental Undertaking letter from the Agency.
  • Loan statement from other Financial Institutions for those who wishes to transfer the loan to NPPF.
  • Letter of Guarantee, Citizenship Identity Card copy and Marriage Certificate of spouse in case the property is in the name of spouse.
  • Letter of Guarantee and Citizenship Identity Card copy of the property owner if the property is owned jointly or close relative.
    • How long will it take to process the loan?
    Three days, provided all required documents are completed and received by NPPF.
    What are the processing fees charged by the NPPF?
    A very nominal processing fee of Nu.500 is charged for any new loan.
    Since there is a grace period, how will my repayments be determined?
    The outstanding interest for the grace period will be added to the loan amount at the time of commencement of the repayment .The EMI will be predetermined on this amount at the time of initial sanction.
    What is EMI? How is it calculated?
    EMI stands for Equated Monthly Installments. The installment comprises both principal and interest components. Your EMI would be calculated depending on the tenor you choose, to repay your loan. The EMI would be higher if you choose to repay within a shorter period as against a longer-term loan. A shorter repayment period, however, reduces your interest cost over the term of the loan.
    How can I repay?
    The EMI are to be deposited by the borrower at the designated bank account maintained with Bank of Bhutan and its branches as conveyed to the client at the time of issuing the deposit invoice book.
    Can I prepay the loan? Are there any penalties?
    Yes, you can prepay the loan at any stage. There are no penalties charged for the prepayment.
    What is the method of calculation of interest and penelty?
    Interest on loans is calculated quarterly on simple daily method on the outstanding principal and charged at the end of each quarter @10% P.a.
    Penalty is charged if an installment has not been paid within 20 days from the due date. Penal interest is calculated from the date the installment is due, not the expiry of the grace period. Penel interest is calculated and added to the outstanding interest figure at the end of each quarter @5% P.a.
    What are the tax benefits of taking NPPF Housing Loan?
    The amount of interest paid on the Housing Loan during the year is deductable from the rental income of the building for the purpose of Personal Income Tax. However, the property should be in the name of the applicant.
    How can I get access to updated information on my loan balance?

    You can visit our website www.nppf.org.bt or send e-mail to us on any enquiry to invest@druknet.bt.The NPPF will also e-mail the information to you provided you have submitted your e-mail address to the NPPF.
    Why is my loan account not updated immediately? / Why NPPF takes time to punch the EMI in my loan account?
    All deposits made by you or deducted from salary are received by the two authorized banks, BoB and BNB. These deposits are confirmed by the banks on a monthly basis. After such deposits are confirmed by the banks, the accounts are credited back dated with effect from the date NPPF received the repayments into its accounts. However, upon request by clients in cases of liquidation, NPPF confirms individual deposits with the bank and updates such deposits immediately.