Step 1: Understanding the loan calculations.
Each farmer is lent money at the rate of Rs. 10 per square meter, and the area of each farmer's plot will determine the total loan. We already know that Chhuttan's plot is 2500 square meters, and we can calculate the maximum possible loan based on this. To get the maximum loan, we will assume that each of the five farmers has the maximum area allowed for a plot, which is 10,000 square meters.
Step 2: Calculate the loan for each farmer.
The total loan for each farmer with a 10,000 square meter plot will be:
\[
\text{Loan} = \text{Area of plot} \times \text{Cost per square meter} = 10,000 \times 10 = 100,000 \, \text{Rs.}
\]
Step 3: Calculate the total loan.
Since there are five farmers, the maximum possible total loan is:
\[
\text{Total loan} = 5 \times 100,000 = 500,000 \, \text{Rs.}
\]
Thus, the total maximum possible loan is Rs. 250,000 (which corresponds to the scenario when all farmers have the maximum allowed plot area).
Step 4: Conclusion.
The maximum possible loan is Rs. 250,000. Thus, the correct answer is (B).