Through this article, we will give you detailed information about the advantages and disadvantages of Kisan Credit Card. We will also tell you what Kisan Credit Card is and why it was implemented.
What Is Kisan Credit Card?
Kisan Credit Card (KCC) scheme was launched in 1998 to enable farmers to easily purchase agricultural inputs like seeds, fertilizers, pesticides etc. based on their holdings. With this, farmers can get cash on time for their production needs and fulfill their farming needs. This scheme has been continued till now for the investment loan requirement of farmers.
Kisan Credit Card Benefits
Benefits of Kisan Credit Card are as follows-
- Loan at cheap interest rate:
Kisan Credit Card offers you loan at affordable interest rates. Generally, you have to pay 9 to 14% interest on a loan. If seen, you also have to pay 9 percent interest for Kisan Credit Card. But on this 9% interest, the government provides rebate under 2 percent subsidy.
Apart from this, if you repay your loan within 1 year, you get additional subsidy of up to 3% in interest. In this way you can take a Kisan Credit Card loan at 4% interest rate. This is much cheaper than the interest charged on any loan.
- Processing Fee:
To take a loan you also have to pay processing fees. Generally around 1 to 2% processing fee is charged on the loan. But in Kisan Credit Card you do not have to pay any kind of processing fee. This loan is available to you without any processing fee.
- Loan amount:
You can take a loan ranging from Rs.50,000 to Rs.3,00,000 through a Kisan Credit Card. If you repay your loan on time, you have to pay only 4% interest on it.
- Security:
You are not required to give any kind of security when taking a loan through Kisan Credit Card. If you take a loan up to ₹ 1,60,000 through Kisan Credit Card, you are not required to deposit any security. But if you take a loan of more than Rs 1,60,000 through credit card, then you have to submit your farm papers to the bank.
- Loan from any bank:
You can get loan from any bank through Kisan Credit Card. Almost all banks provide loan facility to farmers through Kisan Credit Card. No matter which bank you take Kisan Credit Card loan from, you have to pay the same interest on all.
- No need for re-application:
Once you have applied for Kisan Credit Card, you do not need to apply for it again. If you repay your Kisan Credit Card loan within 1 year, then you do not have to apply for it again. You can withdraw your refunded loan whenever required through your Kisan Credit Card. This way you do not have to apply for a loan every year.
- Ten(10) percent loan increase every year:
If you repay the loan taken through Kisan Credit Card on time within 1 year, then you not only get interest rebate, you also get 10% increase in the loan amount for the next year.
- Age of the farmer:
To apply for a Kisan Credit Card, the minimum age of the farmer should be 18 years and the maximum age should be 75 years. Thus, a farmer whose age is between 18 to 75 years can apply for Kisan Credit Card.
- Loan for animal husbandry, fisheries:
You can also take loan for animal husbandry, fish farming etc. through your Kisan Credit Card.
- Insurance Cover:
The benefit of insurance cover is provided to farmers through credit cards. Through this, if a farmer dies in an accident during agricultural work, he is given an amount of ₹ 50,000 and if he becomes disabled, he is provided ₹ 25 thousand.
- Less Documents:
You do not require many documents to take a loan through Kisan Credit Card. For this you have to provide only some important documents like PAN card, Aadhar card, identity card, passport size photo etc. If necessary, only land documents etc. have to be given.
- Crop Insurance:
You do not require many documents to take a loan through Kisan Credit Card. For this you have to provide only some important documents like PAN card, Aadhar card, identity card, passport size photo etc. If necessary, only land documents etc. have to be given.
- Loan Approval:
It is quite easy to get loan approval through Kisan Credit Card. For this you do not have to rush. Through this, it takes only 10 to 15 days for you to get the loan.
- Premature Payment:
If you prepay the loan taken through your Kisan Credit Card, then you do not need to pay any prepayment fee. Generally, if you repay a loan prematurely, you have to pay prepayment charges (foreclosure fees).
Disadvantages Of Kisan Credit Card
Disadvantages of Kisan Credit Card are as follows-
- Farmers get loan through Kisan Credit Card at 4% interest rate. But farmers can avail the benefit of this 4% interest rate only if they repay the loan taken through Kisan Credit Card within one year. If the farmer does not repay the loan taken within 1 year, then the farmer has to pay 7% interest.
- Kisan Credit Card was brought by the government to meet the needs of farmers for inputs for farming. But farmers have started using the loans taken through credit cards not for farming but also for their personal belongings. Because of this the main objective of the government seems to be failing.
- You can take a Kisan Credit Card from any bank. But banks avoid giving loans to farmers because they believe that it is difficult to get back the loan given through Kisan Credit Card. Therefore, getting a loan from any bank through credit card becomes a little difficult.
- To get a loan through Kisan Credit Card, the farmer is not required to pay any kind of processing fee. But due to corruption, farmers have to bribe bank employees to get a loan through their credit card, which makes it a bit expensive for a farmer to get a loan through a credit card.