Kisan Credit Card Interest Rates and factors affecting interest rate

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The Kisan Credit Card (KCC) scheme was introduced by the Government of India to provide farmers with quick access to credit to manage agricultural needs. KCC interest rates are typically low, making it an affordable option for individuals. These rates are fixed by the respective issuing bank and decided based on the amount borrowed.

Kisan Credit Card Interest Rates of Some of the Top Banks

Here are some of the top banks offering the Kisan Credit Card in India with details of the interest rate.

Bank	Kisan Credit Card Interest Rate
SBI	7% p.a. (Up to ₹3 Lakhs)
Axis Bank	8.85% p.a. onwards
HDFC Bank	8.75% p.a.
Indian Overseas Bank	9% p.a. onwards
UCO Bank	7% p.a. (Up to ₹3 Lakhs)

Note: The interest rates provided above may change at the issuer’s discretion and the Government of India’s policies.

Factors Affecting the Kisan Credit Card Interest Rate

Here are some factors that impact the Kisan Credit Card scheme interest rate-

Credit History

A strong credit history, marked by timely repayments, may lead to lower interest rates.

Crop and Livestock Type

The nature of farming operations, such as crop type or livestock, could impact the perceived risk, influencing interest rates.

Loan Amount

You may only get a reduced interest rate up to a certain loan amount. Larger loans will have regular interest rates.

Government Policies

Government initiatives aimed at supporting farmers may lead to lower interest rates on kisan credit cards.

Kisan Credit Card Eligibility Criteria and Documents

Knowing the eligibility checklist and documents required for KCC can help streamline the application process. To check whether you qualify for KCC, you can go through the following sections:

1. Eligibility Criteria

To apply for the scheme, you must be:

An individual or joint borrower who is an owner cultivator
A tenant farmer, shared cropper, or oral lessee
A member of a Self-Help Group or joint-liability group consisting of shared croppers, tenant farmers, etc.

2. Documents Required

If you meet the Kisan Credit Card eligibility, you can apply for the scheme with the following set of documents:

A completed Kisan Credit Card application form
Two passport-size photographs
A valid ID proof such as your PAN Card, Aadhaar Card, Passport, Driving License, or Voter’s ID
A valid address proof such as your PAN Card, Aadhaar Card, or Driving License
Certified proof of landholding by relevant revenue authorities
Cropping pattern with details of acreage
Security documents for loans exceeding ₹1.6 Lakhs or ₹3 Lakhs (as applicable)
Any other documents required by the bank

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.

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What is the difference between simple interest and compound interest for kisan credit cards?

Simple interest means that the banks calculate Kisan Credit Card interest based only on the principal amount at a set point in time. Under the compound interest option, banks compute interest also on the accumulated interest over time.

How is KCC interest calculated?

Banks compute KCC interest based on the rates stipulated under the DBR Master Directions on Interest Rate on Advances. For short-term crop loans, farmers can receive interest subsidies from the Government of India.

Are KCCs interest-free?

Banks charge interest rates for the Kisan Credit Card, but they will be lower than regular credit card interest rates.

What is the KCC limit?

The maximum limit of credit available under kisan credit cards depends on the issuer’s policies.

What are the foreclosure/prepayment charges on a Kisan Credit Card?

The prepayment charges on the Kisan Credit Loan vary per the bank’s specific policies. It could range from NIL to 4% of the foreclosure amount.

What is the maximum tenor and interest rate of the loan you can take on a Kisan Credit Card?

The maximum tenor for Kisan Credit Card loans can be 5 years. The maximum Kisan Credit Card interest rate may extend up to 14.10%, but this differs across banks.

What will be the security or collateral the bank demands to sanction the loan amount?

For hypothecation of crops, you can get a loan of up to ₹3 Lakhs with KCC without pledging an asset as collateral. In case of non-tie-up and tie-up advances, you can obtain collateral security for loans ranging between ₹1 Lakh and ₹3 Lakhs, respectively.

What activities can one use the Kisan Credit Card loan for?

You can use the funds received from KCC to purchase inputs for agricultural purposes and livestock needs. The funds could be used to buy seeds, fertilisers, equipment, and more.