People say KCC loan is 4 percent but my statement shows a higher rate. I am confused about how the cheap rate works.
Why do I only get the 4 percent KCC interest rate if I repay on time?
SSuresh Kumar6mo ago · 173 views
3 Answers
🌾Farmer.in Krishi TeamExpert ✓6mo ago
The KCC crop loan card rate is higher than 4 percent, but two government subsidies bring it down for prompt payers on amounts up to Rs 3 lakh. First there is an interest subvention given to the bank that lowers your effective rate, and second there is a Prompt Repayment Incentive that gives you an extra rebate only if you clear the loan within the due period, usually within one year of drawing it. If you repay on time, both apply and the effective rate works out to around 4 percent on the eligible amount. If you miss the due date, you lose the prompt-repayment part and the rate jumps to the normal card rate, often with overdue interest on top. The exact rates, the eligible ceiling and any changes are revised by the government, so confirm the current terms with your bank before assuming 4 percent.
RRamesh Yadav6mo ago
Mera bhi statement me 7 percent jaisa rate dikhta tha aur main ghabra gaya tha. Branch wale ne samjhaya ki subvention aur prompt repayment baad me adjust hoke 4 percent ho jata hai agar samay par bharo. Time se jama karna sabse zaroori hai.
AAnil Deshpande5mo ago
One pitfall to avoid: the cheap rate is only on the amount up to the ceiling, anything above that is charged at the full card rate. I had drawn a bit extra one year and that extra part was costly. Keep your drawing within the eligible limit if you want the subsidised rate.