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KCC interest rates are MCLR-linked. However, to help farmers secure credit at a subsidised rate, the government may offer interest subvention on a certain part of the KCC limit. In such cases, the Kisan Credit Card interest rate will be adjusted accordingly. A 7% interest is applicable on short-term KCC loans up to 3 Lakhs. Lending institutions are liable to receive a 1.5% interest subversion on the same. Additionally, farmers repaying the loan amount within a year’s duration will qualify for an additional 3% subsidy on the KCC interest rate. 

Kisan Credit Card Interest Rates of Some of the Top Banks

The Kisan Credit Card interest rates vary based on the loan amount and the bank that issues the credit card. Wondering which bank is best for the Kisan Credit Card? Check out the table below to understand the KCC interest rates of some of the top banks in India. 


Kisan Credit Card Interest Rate

State Bank of India’s Kisan Credit Card

Min 7% per annum

Punjab National Bank’s Kisan Credit Card

Min 7% per annum 

Axis Bank’s Kisan Credit Card

8.85% per annum (interest subvention provided)

HDFC Bank’s Kisan Credit Card

Min 9% per annum

Indian Overseas Bank’s Kisan Credit Card

7% per annum (interest subvention provided)

UCO Bank’s Kisan Credit Card

7% per annum (interest subvention provided)

The Kisan Credit Card interest rate can be as low as 2% per annum, and can go all the way up to 15-17% per annum. The interest rates for a KCC as levied by some of the top banks in the country are mentioned below. 

1. State Bank of India (SBI) Kisan Credit Card

When it comes to Kisan Credit Card loans, it is worth mentioning that the State Bank of India is one of the largest issuers of KCC loans. 7% per annum is the Kisan Credit Card interest rate charged by the State Bank of India on an amount lower than ₹3 Lakhs.

2. Punjab National Bank (PNB) Kisan Credit Card

Punjab National Bank is also one of the major public sector banks that offers Kisan Credit Card loans. It is quite easy to apply for a KCC loan via Punjab National Bank. A minimum KCC loan interest rate of 7% per annum is charged by the bank to farmers. 

3. HDFC Bank Kisan Credit Card

HDFC Bank, a major private bank, is also offering a Kisan Credit Card loan scheme to farmers. One can receive a minimum Kisan Credit Card interest rate of 9% per annum by availing a KCC loan from HDFC Bank.

4. Axis Bank Kisan Credit Card

A competitive KCC loan interest rate is offered by Axis Bank, as it provides interest subventions: you can get a Kisan Credit Card interest rate of up to 8.85% per annum. 

5. Indian Overseas Bank Kisan Credit Card

The  Kisan Credit Card interest rate for loans from IOB of up to ₹3 Lakhs is 7% per annum. This is only in case of loans with a tenure of 1 year from the sanction date or the renewal date.


A KCC loan interest rate subsidy of 3% per annum is available from the government of India for farmers who make prompt repayments. In the case of loans above ₹3 Lakhs, the interest rate is variable. Currently, it is equal to the one-year MCLR (Marginal Cost of Funds Based Lending Rate) plus 2.50%.

Factors Affecting the Kisan Credit Card Interest Rate

There are quite a few factors that can ultimately affect the KCC interest rate that’s applicable to you. Here’s a quick look at some of the most important ones.  

1. Amount of Loan 

The KCC loan amount is one of the biggest factors influencing the interest rate on Kisan Credit Cards. KCC holders get to enjoy a low-interest rate starting from 7% per annum on loans of up to ₹3 Lakhs. For loan amounts above ₹3 Lakhs, the interest rates are higher and vary based on the issuing bank. 

2. Interest Subsidy

For a loan amount of up to ₹3 Lakhs, some banks offer an interest subsidy as per the Reserve Bank of India (RBI) scheme. This interest subsidy allows KCC holders to get a relief of 2% to 3% per annum on their loan, which can help lower the effective interest rate. 

3. Additional Subsidy

In some cases, banks go on to offer an extra interest subsidy of 3%, over and above the subsidy available under the RBI scheme. This is generally available to individuals who have a track record of prompt repayment.

4. Simple Interest

In the case of timely bill payment and settlement of existing dues, banks calculate the finance charges using simple interest. Under this method, the interest is only calculated on the principal borrowed amount.

5. Compound Interest

If there's a delay in timely payment, banks may levy compound interest on the outstanding amount. Under this method, the interest continues to be levied on both the unpaid principal and interest component until the amount is repaid. This can effectively increase the interest on Kisan Credit Cards significantly.

FAQs about Kisan Credit Card Interest Rates

What is the difference between simple interest and compound interest for Kisan Credit Cards?

Simple interest is calculated on the entire principal loan amount borrowed at a specific rate and at a set point in time. Compound interest is interest charged on the previous unpaid interest amount as well as the principal amount. In order to enjoy the benefits of simple interest, borrowers should make payments before the due date. The difference between these two types of interest rates applies to Kisan Credit Card loans as well.

How is KCC interest calculated?

The interest on Kisan Credit Cards is calculated using one of two methods - simple interest or compound interest. In the case of borrowers who make prompt repayments, interest is calculated using the simple interest method. In the case of borrowers who delay or miss repayments, the interest is calculated using the compound interest method.

Are KCCs interest-free?

No, Kisan Credit Cards are not interest-free. In fact, issuing banks charge interest on the amount spent on the card. The rate of interest applicable on the credit card varies from one bank to another.

What is the KCC limit?

The Kisan Credit Card limit varies from one bank to another and is dependent on various factors, such as a farmer’s credit record, the number of crops cultivated, and post-cultivation expenses.

Is simple interest charged on a KCC loan?

The interest on KCC is calculated in both simple interest and compound interest.

What are the foreclosure/prepayment charges on a Kisan credit card?

The issuing bank will decide how much to charge on the Kisan Credit Card in terms of processing fees, insurance premiums (if applicable), property mortgage deed fees, etc. The foreclosure/prepayment charges, therefore, would vary. 

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

The Kisan Credit Card loan's entire term is five years. The HDFC Bank Kisan Credit Card interest rate is 9% per annum, which is the highest KCC interest rate. 

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

If the loan is for less than ₹1.60 Lakhs, banks won't ask for security or collateral. However, banks may request additional protection if they feel it necessary. Giving up the crops used as collateral for the loan or other assets such as tractors, trolleys, and so on are also acceptable forms of collateral.

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

A KCC loan can be used to pay for costs associated with agricultural production and/or working capital requirements, such as maintaining farm equipment or other related operations like keeping dairy animals, etc.

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