Interest Subvention & Your Real Crop-Loan Rate
Cuts the rate
Enter principal, bank rate, subvention and the prompt-repayment rebate to get your effective rate, interest payable, what you'd pay without the scheme, and the saving.
Enter your crop loan
Next: borrow within the subvention ceiling and repay on time to lock the 4% rate and save ₹15,000; missing the due date forfeits the rebate.
Rates, the prompt-repayment incentive and the ceiling (e.g. ₹3 lakh KCC) are scheme-specific — confirm current terms with your bank.
Interest subvention — key facts
- Effective rate
- bank − subvention − prompt rebate
- Interest
- principal × rate × term
- Prompt incentive
- earned only by repaying on time
- Cheapest rate
- ≈ 4% with both reductions
- Subvention ceiling
- ₹3 lakh (India)
- Term
- usually within one season
- Currencies
- 8 supported
- Privacy
- Runs in your browser; nothing uploaded
Pay on time, pay far less
Crop loans are among the cheapest credit a farmer can get — but only if you understand the maths. The bank quotes one rate, yet the government cuts it through interest subvention, and cuts it again with a prompt-repayment incentive that you only earn by repaying on or before the due date. Stack both and the effective rate can fall to around 4% a year; miss the due date and you pay the full bank rate. Knowing the real rate before you borrow is the difference between cheap working capital and an expensive surprise.
This tool computes your effective rate, the interest payable, what you'd pay without the scheme, the saving, and the total repayable, in 8 currencies. Use it to see exactly what timely repayment is worth and to plan your season's finances. Pair it with the Crop Loan (KCC) Eligibility, Farm Loan EMI and Crop Insurance Premium tools for the full picture.
Know the real rate
See the effective rate after every reduction.
Value timely repayment
Check what the prompt rebate saves you.
Compare with & without
See the interest you'd pay at the bank rate.
Plan the repayment
Know the total repayable before you borrow.
Frequently Asked Questions
What is interest subvention on a crop loan?+
Interest subvention is a government subsidy that lowers the interest you actually pay on a crop loan. The bank lends at its normal rate, but the government reimburses a portion — so your effective rate is the bank rate minus the subvention, and minus a further prompt-repayment rebate if you repay on time. This tool works out that effective rate and the money you save.
How is the effective interest rate calculated?+
Effective rate = bank rate − subvention − prompt-repayment rebate. In India, for example, a 7% bank rate with a 1.5% subvention and a 3% prompt-repayment incentive brings the effective rate to about 4% a year on loans up to the ceiling. The tool subtracts both reductions and shows the rate and the interest payable.
How is the interest amount worked out?+
Interest = principal × effective rate × term. Enter the loan amount, the effective rate the tool computes, and the loan term in years (crop loans are usually under a year). The tool shows the interest payable under the scheme, what you'd pay at the plain bank rate, and the difference you save.
What is the prompt-repayment incentive?+
It's an extra rate reduction you earn only by repaying the loan on or before the due date. Miss the due date and you lose it, and the loan reverts to the higher bank rate (sometimes with penal interest). The tool lets you include or exclude the rebate so you can see exactly what timely repayment is worth.
Why does paying on time drop my rate to ~4%?+
Because the prompt-repayment incentive is usually the biggest single reduction. A 2% base subvention might cut the rate to 5%, but the additional 3% prompt-repayment rebate is only credited if you repay on time — stacking both is what brings the effective rate down to roughly 4%. Repay late and you pay the full bank rate.
What is the subvention ceiling?+
Subvention applies only up to a loan ceiling (₹3 lakh in India, recently raised). Borrowing above the ceiling means the excess carries the full bank rate with no subsidy. Keep your subsidised crop loan within the ceiling to capture the cheapest rate, and treat any additional borrowing separately.
Does the subvention apply to the whole loan term?+
Subvention typically covers the standard crop-loan period (often up to one year). If you don't repay within that window, the concession can lapse and the loan attracts the normal rate for the overdue period. The tool assumes the rate applies for the term you enter, so use a realistic in-season term.
Can I use this outside India?+
Yes — the maths (bank rate minus any subsidy and rebate, times principal and term) applies to any subsidised farm credit anywhere. Choose your currency and enter your local rates. The specific subvention names, percentages and ceiling are India-specific, but the effective-rate calculation is universal.
Is this an official figure?+
No — it's a planning estimate. Actual subvention rates, the prompt-repayment incentive and the ceiling are set by government notification and your bank's terms, and they change from time to time. Use this tool to understand your likely effective rate and saving, then confirm the current figures with your bank.
How can I make sure I get the cheap rate?+
Stay within the subvention ceiling, keep the loan within the eligible crop-loan period, and above all repay on or before the due date to earn the prompt-repayment incentive. Set a reminder ahead of the due date — the difference between the subsidised ~4% and the full bank rate is real money this tool quantifies for you.