Farm Loan Interest Subsidy Calculator

Work out farm loan interest subsidy instantly with clear inputs, formula shown and shareable results.

About Farm Loan Interest Subsidy Calculator

Interest subvention reduces the rate the borrower actually pays: the bank charges its rate and government reimburses the subvention percentage, often with an extra incentive for prompt repayment. Simple interest on the outstanding crop loan over the season gives the gross and net interest cost.

Formula

Interest with subvention

Gross interest = loan x rate x years; benefit = loan x subvention x years; effective rate = rate - subvention

Worked example

With the default values below, Farm Loan Interest Subsidy Calculator returns Interest Payable After Subvention of $18,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Loan Amountminimum 0: 300,000
Bank Interest Rateaccepts 0–40 %: 9 %
Interest Subventionaccepts 0–40 %: 3 %
Loan Periodminimum 1 months: 12 months

Results

Interest Payable After Subvention: $18,000.00
Interest At Bank Rate: $27,000.00
Interest Subvention Benefit: $9,000.00
Effective Interest Rate: 6.000%

Step by step

1Values used
2Interest with subvention
3Interest Payable After Subvention= 18,000.00
4Interest At Bank Rate= 27,000.00
5Interest Subvention Benefit= 9,000.00
6Effective Interest Rate= 6.000

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Interest subvention schemes, caps and eligibility change with each annual notification. Confirm current terms with your lending bank.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Interest subvention schemes, caps and eligibility change with each annual notification. Confirm current terms with your lending bank.

Frequently Asked Questions

Is subvention conditional?

Yes. Prompt repayment within the stipulated period is normally required, and the additional incentive is forfeited if the account becomes overdue — the full rate then applies retrospectively.

Does subvention apply to the whole loan?

Schemes usually cap the subvented amount, commonly at the first few lakh of crop loan. Interest above the cap is charged at the full rate.