Loan Against KVP in Post Office- KVP Loan

If you hold a KVP (Kisan Vikas Patra) certificate then you can use this as collateral to get a loan for business or personal use. Remember that the loan against KVP in the post office must be repaid within the maturity period.

Kisan Vikas Patra (KVP) is provided by India Post. It is a savings plan in the form of a certificate. This is a small, fixed-rate savings scheme framed to double your investment in 124 months (10 years and 4 months).

Kisan Vikas Patra scheme was started by India Post in the year 1988. You can purchase KVP from Post Office or any designated public sector bank. 

In 2011 the scheme was closed because of the apprehensions of misuse, but in 2014 the scheme was started again. 

Loan on KVP (Kisan Vikas Patra) 

This may be good news for account holders of the Post Office especially for those who have invested in KVP because the certificate can be used as collateral to get a loan. The post office is not authorized to lend directly on different saving schemes, which they run.

But a loan against KVP in the post office is possible from commercial banks like SBI, HDFC, AXIS, etc. Non-availability of loans particularly for those investors that live in rural areas constrained them to rely on loans from local creditors and banks that charge high interests on these loans. 

So for such investors, KVP is a good investment regarding getting a loan on its investments. 

Besides the scheme is not liable to pay taxes at maturity, also the investors will receive returns in full at the time of scheme maturity. This is due to that interest earned on the earnings of Kisan Vikas Patra is taxed, but is deducted regularly and is not deducted when the KVP certificate becomes matured. 

Remember that KVP is not for large companies and organizations or Hindu Undivided Families (UHF) means these are not eligible to invest in KVP. NRIs are also not allowed to invest in this scheme. 

Regarding tax benefits under section 80C of the Income Tax Act KVP does not provide any tax benefit. But it serves as a great guarantee against which an investor can take a loan from financial institutions and commercial banks.  

Also Read: Indian Post Office Fixed Deposit Scheme: FD Account

Kisan Vikas Patra Loan Eligibility and Other Details

If you hold a Kisan Vikas Patra certificate and you want a loan against it then you can do it by using KVA as collateral. The details below will help you in the procedure. 


To get a loan on KVP you must have a Kisan Vikas Patra certificate in your name. You cannot use another person’s KVP to acquire a loan, which means you are not eligible for a loan.  

Purpose of Loan

The loan which you will get against the KVP certificate can be used for any purpose, business, or personal use.

Interest Rates and Charges on Loan

Interest rates and charges vary from time to time on Kissan Vikas Patra loan. There are charges for services that most banks charge on this loan, and different banks also charge different fees.

Loan Amount on KVP

The amount loan against KVP in the post office usually depends on how many years have passed since the Kisan Vikas Patra certificate was issued in the investor’s name. But today it also depends on the policies and rules of the bank you are looking for a loan.  

For example, if you will get a loan on KVP from the State Bank of India (SBI) the interest rates you have to pay are 11.90%. 

Loan Repayment Period

The loan amount must be repaid within the maturity period of KVP or early. 

Other Benefits of Kisan Vikas Patra 

Unlike other investments, the advantage of Kisan Vikas Patra is that it is easy to transfer between different people and post offices in the country with a few formalities as possible. In case the Kisan Vikas Patra certificate has been lost or misplaced the process of making a duplicate copy of this certificate is very easy. 

The certificate can sometimes be accidentally destroyed, damaged, or even mutilated over a long period, even in this case, it is also very easy to get a duplicate copy.

The Kisan Vikas Patra program is backed by the Indian government and guarantees a full return on the investment you have made under this plan. Therefore, this savings plan is the best choice for investors who do not want to take risks. 

KVP investments give you returns, lower than Public Provident Fund (PPF) or National Savings Certificate (NSC) schemes, but much higher than the returns you can earn on fixed deposits.

Kisan Vikas Patra scheme savings guarantees a return. If you want to convert your (KVP) savings into cash before the maturity of the scheme, you can easily do so once the lock-in period completes, which is two and a half years. 

Three types of KVP certificates are available with the post office, which are Single holder type, joint A type, and joint B type. 

A single holder certificate is given to an individual adult for self or on the minor’s behalf. 

Joint type A certificate is given in the name of two adults jointly, the certificate is paid to both the investors at maturity or the one which survives. 

A joint type B certificate can be acquired by two adults in a joint account, the certificate is paid to either of the investor or the survivor. 


Having the Kisan Vikas Patra certificate in your name may be good for you because you can avail lone on this certificate by using it as collateral. Post Office will not give you a loan on KVP as it has no such authority. But you can take a loan against KVP in the post office from banks. 

The loan amount that a bank will give you depends on the bank’s policies and other things. The loan amount has to be paid during the maturity of KVP. So investing in KVP is a good investment in terms of savings and getting a loan. 

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