Kisan Credit Card (KCC) which was launched to protect Indian farmers from the high interest rates charged by moneylenders in the unorganized sector. Through this, farmers can take loans if needed. The interest charged is also dynamic i.e. if customers pay on time then they are charged less interest. Continue reading for more information.
Let us tell you that the main objective of the Kisan Credit Card Loan is to provide loans to farmers at low-interest rates. Before this scheme, farmers were dependent on moneylenders who charged high-interest rates and were strict about due dates. This created a lot of problems for the farmers, especially when they faced disasters like hailstorms, droughts, etc.
On the other hand, Kisan Credit Cards charge lower interest rates on loans and offer easy repayment processes. Apart from this, crop insurance and collateral-free insurance are also provided to the user. The details of the Kisan Credit Card Loan Scheme are as follows:
- The interest rate offered on the loan can be as low as 2.00%.
- Banks will not ask for a security guarantee on loans up to Rs 1.60 lakh.
- Users are offered crop insurance coverage against various types of disasters.
- Insurance coverage is provided to the farmer against permanent disability and death, insurance coverage is also provided to the farmer against other risks.
- The repayment period is decided depending on the harvesting of the crop and its marketing period
- The maximum loan of the cardholder is Rs. Can take up to Rs 3.00 lakh
- Farmers who deposit money in a Kisan Credit Card account will get higher interest rates.
- On prompt payment, a simple interest rate is charged by the farmers.
- Compound interest is charged when cardholders fail to make timely payments.
Eligibility for Kisan Credit Card Loan:
Kisan Credit Card loan can be provided to any person who is engaged in agriculture, allied activities, or other non-agricultural activities. The following are the detailed criteria to be eligible for a Kisan Credit Card loan:
- Minimum age – 18 years
- Maximum age- 75 years
- If the borrower is a senior citizen (above 60 years), a co-borrower is mandatory, where the co-borrower must be the legal heir.
- All Farmers – Individual/Joint Farmers, Owners
- Tenant farmers, oral lessees, and sharecroppers, etc.
- SHGs or Joint Liability Groups including tenant farmers
- Documents required for KCC loan. Kisan credit card
- The following documents the bank requires to process the Kisan Credit Card Loan Scheme in India.
May require:
Proof of Identity PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License or any other Government approved Photo ID, Proof of Address, ID, Aadhar Card, Passport, Utility Bill (not older than 3 months) or any other Government approved photo ID. Approved address proof, proof of income for the last 3 months, bank statements, salary slips for the last 3 months, audited financial statements for the last two years (for self-employed), Form 16, etc.
How to Apply for It and Use Kisan Credit Card Loan:
Are you applying for a loan again and again? Consider applying for the HDFC Bank Easy EMI Card which can be used to meet your low-level credit needs. Key features include:
- The minimum monthly income requirement is Rs. only 10,000.
- 5% cashback on all spends with a minimum spend. Rs 2,250.
Cashback per month:
- Transactions above Rs 10,000 will be converted into EMIs.
- Visit the preferred bank offering Kisan Credit Card. If the bank allows KCC online application then download it.
Fill out the application form and submit it to the loan officer:
The loan officer will determine the Kisan Credit Card loan limit after considering all the factors and will ask for collateral if the loan amount exceeds Rs 1.60 lakh.
Kisan Credit Card Loan Usage:
Once the customer receives their credit card they can immediately begin using it to make cash withdrawals or direct purchases. Some banks also issue checkbooks. The customer must ensure that they will pay the amount promptly.
This will ensure that only simple interest will be applicable on the loan and not compound interest. If simple interest is applied then the farmer will have to pay less as compared to compound interest where the payment will be higher.
Also Read: Just Do One Thing for Your Daughter in SSY Scheme, Rs 70 Lakh Will Come Into Your Account