KCC Loan Interest Rate 2025: The Kisan Credit Card (KCC) Loan is a crucial financial tool for Indian farmers, helping them access affordable credit for agricultural needs. As we enter 2025, farmers must stay informed about the latest interest rates, government subsidies, and bank rules associated with the KCC scheme.
This article provides a detailed breakdown of KCC loan interest rates in 2025, government benefits, repayment rules, and other essential aspects that will help farmers make informed financial decisions.
What is the Kisan Credit Card (KCC) Loan?
The Kisan Credit Card (KCC) scheme was introduced by the Government of India in 1998 to provide short-term credit to farmers at affordable interest rates. The scheme covers expenses related to crop production, post-harvest activities, farm machinery, and working capital needs.
The loan is offered by various banks, including public sector banks, private banks, regional rural banks (RRBs), and cooperative banks, under the guidelines set by the Reserve Bank of India (RBI) and NABARD (National Bank for Agriculture and Rural Development).
KCC Loan Interest Rate 2025
The interest rate on KCC loans varies based on factors like loan amount, government subsidy, and timely repayment. Below is a general outline of KCC loan interest rates in 2025:
KCC Loan Interest Rate Structure 2025
| Loan Amount | Base Interest Rate | Interest Rate After Government Subsidy* |
|---|---|---|
| Up to ₹3 lakh | 7% per annum | 4% per annum (after 3% subsidy) |
| ₹3 lakh – ₹5 lakh | 8% – 10% per annum | Varies by bank |
| Above ₹5 lakh | 9% – 12% per annum | No subsidy on higher amounts |
*(Government provides an interest subvention of 3% if the loan is repaid on time.)
🔹 Timely Repayment Benefit: If the farmer repays the loan within the due date, an additional 3% subsidy is provided, reducing the effective interest rate to 4% per annum for loans up to ₹3 lakh.
🔹 Interest Calculation: Interest is calculated on a daily reducing balance basis, ensuring that borrowers pay interest only on the outstanding amount.
Government Subsidy & Support on KCC Loan (2025)
To reduce the financial burden on farmers, the Government of India provides interest subsidies and other benefits under the KCC scheme.
1. Interest Subvention Scheme:
- The government offers a 3% interest subsidy on short-term crop loans up to ₹3 lakh if repaid within the stipulated time.
- This reduces the effective interest rate to 4% per annum.
2. Loan Restructuring for Farmers in Distress:
- In case of natural calamities (droughts, floods, cyclones), the government allows loan restructuring and extension of repayment periods without penalty.
3. Credit Guarantee for Small & Marginal Farmers:
- The government provides credit guarantee support through NABARD to ensure that even small and marginal farmers can access loans without collateral.
4. PM Kisan Samman Nidhi Yojana Integration:
- Farmers receiving PM-Kisan benefits can also use their KCC for additional financial support.
Bank Rules & Eligibility for KCC Loan 2025
To avail of the Kisan Credit Card loan, farmers need to fulfill certain criteria and follow bank regulations.
Eligibility Criteria:
✔️ The applicant must be an individual farmer, joint farmer group, or self-help group (SHG).
✔️ The applicant must be engaged in crop production, animal husbandry, fisheries, or allied agricultural activities.
✔️ Tenant farmers, oral lessees, and sharecroppers are also eligible under specific conditions.
✔️ The farmer must maintain a good credit history with banks.
KCC Loan Application Process:
- Visit the nearest bank (SBI, PNB, HDFC, ICICI, etc.) or apply online through the bank’s website.
- Submit required documents (land ownership proof, Aadhaar card, PAN card, bank account details, etc.).
- The bank will verify the documents and process the application.
- Once approved, the KCC is issued along with a passbook and a cheque book/debit card for transactions.
Repayment Rules:
📌 Repayment Period: Generally, repayment is linked to the harvest and marketing period of crops.
📌 Penalty for Default: If a farmer fails to repay on time, the interest rate can increase by 2%-3%, and subsidy benefits may be lost.
Here’s a detailed comparison of KCC loan interest rates from different banks in 2025 to help you choose the best option:
Comparison of KCC Loan Interest Rates by Bank (2025)
| Bank Name | Base Interest Rate | Effective Interest Rate (After 3% Subsidy) | Loan Amount Without Collateral | Processing Fee |
|---|---|---|---|---|
| State Bank of India (SBI) | 7% p.a. | 4% p.a. (for loans up to ₹3 lakh) | ₹1.6 lakh | No processing fee for loans up to ₹3 lakh |
| Punjab National Bank (PNB) | 7% p.a. | 4% p.a. (if repaid on time) | ₹1.6 lakh | ₹500-₹1,000 for higher loan amounts |
| Bank of Baroda (BOB) | 7% – 8% p.a. | 4% – 5% p.a. | ₹1.6 lakh | ₹1,000 or 0.5% of loan amount |
| HDFC Bank | 8% – 10% p.a. | Varies | ₹1.5 lakh | 0.5% of loan amount |
| ICICI Bank | 9% – 11% p.a. | Varies | ₹1.5 lakh | ₹1,500 – ₹2,000 |
| Axis Bank | 8.5% – 10% p.a. | Varies | ₹1.5 lakh | 0.75% of loan amount |
| Regional Rural Banks (RRBs) | 7% p.a. | 4% p.a. | ₹1.6 lakh | No processing fee for small farmers |
| Cooperative Banks | 7% – 9% p.a. | 4% – 6% p.a. | ₹1.5 lakh | ₹500 – ₹1,000 |
📌 Note:
✔ Government provides a 3% interest subvention for loans up to ₹3 lakh if repaid on time.
✔ Interest rates for private banks (HDFC, ICICI, Axis) tend to be higher than public sector banks.
✔ SBI, PNB, and RRBs offer the most affordable KCC loans with minimal processing fees.
Best KCC Loan Options Based on Different Needs
🔹 For lowest interest rates: ✅ SBI, PNB, and RRBs (4% after subsidy)
🔹 For quick processing: ✅ HDFC & ICICI Bank (Faster approvals but higher rates)
🔹 For small & marginal farmers: ✅ Cooperative Banks & RRBs (More flexible policies)
🔹 For higher loan amounts: ✅ ICICI, Axis, and Bank of Baroda (Higher loan limits but collateral may be needed)
FAQs About KCC Loan Interest Rate 2025
🔹 1. What is the maximum loan amount under the KCC scheme?
💬 The maximum loan amount varies by bank, but short-term loans up to ₹3 lakh are eligible for a government interest subsidy. Loans above this amount have market-linked interest rates.
🔹 2. Can I apply for a KCC loan online?
💬 Yes, many banks offer online KCC applications through their websites or apps. Farmers can also visit Common Service Centers (CSCs) for assistance.
🔹 3. What happens if I fail to repay my KCC loan on time?
💬 If repayment is delayed, the interest subsidy benefit is lost, and the bank may charge a higher interest rate (up to 12%).
🔹 4. Can tenant farmers apply for a KCC loan?
💬 Yes, tenant farmers, oral lessees, and sharecroppers are eligible under specific conditions, provided they have necessary land lease agreements or revenue records.
🔹 5. Is collateral required for a KCC loan?
💬 For loans up to ₹1.6 lakh, no collateral is required. However, for higher loan amounts, banks may ask for land mortgage or other security.
Conclusion
The Kisan Credit Card loan remains one of the most affordable and beneficial credit schemes for farmers in 2025. With an interest rate as low as 4% (after subsidy), government support, and flexible repayment options, it continues to be a crucial financial tool for Indian agriculture.
Farmers should take advantage of timely repayment benefits and stay updated with the latest bank policies to maximize the benefits of the KCC scheme.
📌 For more details & to apply online, visit:
🔗 Official KCC Loan Portal – SBI
🔗 NABARD KCC Guidelines