Different cash credit facility schemes started by GOI
The center and state governments of India have introduced several cash credit schemes and other credit facilities over the years. However, each of these schemes targets different segments of society.
For instance, the Kisan Credit Card initiative is designed to meet the requirements of farmers, whereas, the Bihar student credit card scheme introduced by the Bihar government is meant for pupils pursuing higher education. To become a beneficiary of a relevant cash credit facility scheme, individuals must find out more about them in detail so that they can streamline the application process accordingly.
What is a cash credit scheme?
Generally, a cash credit scheme is a short-term financing facility, which helps eligible borrowers to access funds as and when required. Typically, such a facility accompanies short repayment tenure and comes with a prefixed cash limit.
Individuals can withdraw funds from that specified limit multiple times to meet various requirements. You must note that the upper limit is decided as per an individual’s credit history and repayment capability, and is somewhat similar to how the limit for a credit card is determined.
However, payment card providers allow users to increase their credit card limit and make higher spends. That option is not available to beneficiaries of government-sponsored cash credit schemes.
Top 4 credit schemes in India
These are among the most noteworthy cash credit and loan schemes –
- Kisan Credit Card (Crop loan)
The crop loan is designed for farmers, tenants, and sharecroppers, and allows farmers to avail a loan of up to Rs.3 lakh. One can use the fund to meet the costs related to crop production and maintenance of farming equipment.
Generally, the rate of interest accompanying KCC is low and easy to repay. Moreover, it comes with flexible repayment tenure, a collateral-free, and extensive crop insurance cover. All individuals between the age of 18 years and 75 years associated with farming are eligible to apply for a Kisan Credit Card online.
- Revolving cash credit scheme
This cash credit scheme provides farmers with quick access to funds to account for their agricultural requirements. Typically, farmers who own land can become a beneficiary of this scheme. The credit limit for this scheme is capped at Rs.1.5 lakh.
- Bihar Student Credit Card Yojana
Essentially, it is a loan scheme that is designed for students to help them pursue their higher education. Under the Bihar Student Credit Card Scheme, students who have cleared their class 12 exam can avail of funding of up to Rs.4 lakh at a nominal rate of interest. Typically, the process of repayment starts once the cardholder secures his/her first job.
- Cash credit facility against collateral or hypothecation of stock
This scheme is available to entrepreneurs or traders. They can avail of this cash credit scheme to meet their business-oriented requirements, like bridging the working capital gap. Moreover, depending on the type of scheme, applicants may or may not have to provide an asset or stocks as security.
It must be noted that these cash credit facility schemes accompany stringent eligibility criteria, restrictions on end-use, and a restricted credit limit. As an alternative, individuals may consider availing a credit card from a leading financial institution that comes with a higher limit, flexible eligibility criteria, and involves competitive rates of interest to help repay credit card debt quickly.
What’s more, credit cards like Bajaj Finserv RBL Bank SuperCard offer a range of features to the users, including 50-days interest-free cash withdrawals, EMI conversion, and personal loans against unutilized cash limit.
Additionally, leading financial institutions like Bajaj Finserv extend pre-approved offers on credit cards to facilitate a smooth application process. Such offers are also available on personal loans and business loans. You can check your pre-approved offer online by sharing your name and contact details.
Even if you are not eligible for a pre-approved offer, you can apply for a credit card online in 3 steps easily.
Thus, it’s evident that several cash credit facility schemes, like a Bihar student credit card, are available to the public. However, one must make sure to find out the accompanying terms and requirements before applying for them.