Loan Against Kisan Vikas Patra (KVP): How to Borrow Against Your KVP in 2025

Kisan Vikas Patra (KVP) is a savings certificate scheme from India Post that doubles your investment over a fixed period. While primarily a savings tool for rural and semi-urban investors, KVP certificates can also be used as collateral to access loans when you need funds urgently.

Overview of Loan Against KVP

Just like NSC, KVP certificates can be pledged with banks and financial institutions to get loans. The certificate is endorsed by the postmaster in favour of the lender, and a loan is advanced based on the certificate’s current value. This allows you to access liquidity without surrendering your investment and losing the compounding benefit.

KVP is currently available with a tenure of approximately 115 months (as of 2025), doubling money at an interest rate of 7.5% per annum compounded annually. Banks like SBI, Canara Bank, Punjab National Bank, and Bank of Baroda offer loans against KVP certificates.

Interest Rates and Loan Amounts

Lender	Loan Amount	Interest Rate (Per Annum)
SBI	Up to 85% of KVP value	9.50% – 11.50%
Punjab National Bank	Up to 80% of KVP value	9.50% – 11.00%
Canara Bank	Up to 85% of KVP value	10.00% – 11.50%
Bank of Baroda	Up to 80% of KVP value	9.75% – 11.25%

Since KVP earns 7.5% per annum, the effective net cost of a loan at 10% would be approximately 2.5%, which is quite attractive compared to personal loans or gold loans.

Eligibility

• Indian resident who is the registered holder or joint holder of KVP certificates
• KVP must be active (not yet matured or prematurely encashed)
• KVP purchased in the name of a minor can be pledged by the guardian
• Trusts and societies may also be eligible if KVP is in their name

Documents Required

• Original KVP certificates
• Aadhaar card and PAN card
• Address proof
• Transfer and pledge endorsement form (from the post office)
• Bank loan application form

Application Process

Step 1: Endorse KVP at Post Office

Visit the post office where the KVP was purchased. Submit a written request to transfer/pledge the KVP in favour of your chosen bank. The postmaster endorses the certificates with the transferee’s name (the bank) and stamps them accordingly.

Step 2: Apply at the Bank

Visit your bank branch with the endorsed KVP certificates and KYC documents. The bank assesses the current value of the certificates and sanctions the loan, typically up to 80-85% of the face value or current value.

Step 3: Disbursal

The loan amount is credited to your bank account within 1 to 3 working days after all documents are verified.

KVP Value Calculation

KVP certificates are issued at face value. They double in approximately 115 months at 7.5% annual compounding. Banks may calculate the loan based on either the face value or the current accrued value (which is higher if the certificate is older). Ask your bank which basis they use for valuation.

Frequently Asked Questions

Can a farmer take a loan against KVP?

Yes. KVP was originally designed for farmers (the name means Farmer Development Certificate), and any KVP holder including farmers can pledge it for a loan. However, for agricultural loans with priority sector benefits, a gold loan or Kisan Credit Card may offer better rates.

What is the minimum KVP amount required to get a loan?

There is no specific minimum set by the government, but most banks require a minimum loan size of Rs. 10,000 to Rs. 25,000 to make the process viable. Since KVP minimum investment is Rs. 1,000, you would need to hold multiple certificates for a meaningful loan amount.

Is it better to encash KVP or take a loan against it?

If you have a short-term fund need and can repay within a year, taking a loan and maintaining the KVP investment is usually smarter. If you need funds for an extended period or the KVP is near maturity, premature encashment may be simpler.

Does the post office give loans directly against KVP?

Post offices generally do not directly lend against KVP. They only endorse the transfer. The actual loan must be availed from a bank or NBFC.