The agriculture sector is one of the most labor-intensive sectors employing the largest number of people in the world. It is also one of the most unregulated sectors which required a lot of government support to be afloat.
One of the key areas of government support is finances. Indian Government provides a lot of subsidies and aid to the farmer.
One such support is the Agricultural loan at low-interest rates which can be used to perform multiple ago-related activities like purchasing lands, seeds, fertilizers, machinery, etc. In this article, we will discuss Agriculture Loan Interest rates, Schemes, Eligibility, etc.
List of Agriculture Interest Rates Offered by Banks
The following is the list of Agricultural Interest Rate Offered by Banks-
| Name of the Bank | Interest Rate | Processing Fee |
| Central Bank of India (Cent Kisan Tatkal Scheme) | 8.70% p.a. onwards | Up to Rs.25,000 – Nil Above Rs.25,000 – Rs.120/- per lakh or part thereof Maximum: Rs.20,000 |
| IndusInd Bank (Crop Loan) | 10.15% – 14.75% p.a. | Up to 1% plus service tax |
| HDFC Bank (Retail Agri Loans) | 9.10% – 20.00% p.a. | 2% to 4% or Rs.2,500 |
| Federal Bank (Federal Green Plus Loan Scheme) | 11.60% p.a. | As per the lender’s terms and conditions |
| Union Bank of India (Land Purchase Loan) | 8.70% p.a. onwards | Up to Rs.25,000 – Nil |
| Karur Vysya Bank (Green Harvester) | 10.30% p.a. | As per the lender’s terms and conditions |
| Canara Bank (Kisan Suvidha Scheme) | 10.10% p.a. | As per the lender’s terms and conditions |
| Andhra Bank (AB Kisan Rakshak) | 13.00% p.a. | As per the lender’s terms and conditions |
| UCO Bank (UCO Kisan Bhoomi Vridhi) | 3.10% – 3.50% p.a. | Nil up to Rs.3 lakh |
Types of Agricultural Loans
The following are the types of Agricultural Loans-
Crop Loan
Crop Loans are those loans that are provided by the bank to the farmer for purchasing daily essential needs like fertilizers, Seeds, electricity bills, etc. These crop loan helps the farmer to not get into the debt cycle and still get a loan for farming activities.
Agricultural Term Loan
It is a long-term loan plan which allows the farmer to purchase non-essential needs like upgrading machinery, windmills, solar panels, etc.
Solar Pump Set Loan
Solar Pump Set Loan is a loan provided by the bank specifically for the installation of solar pumps in the farming field.
Farm Mechanization Loan
Any mechanization which comes under farming activities is covered under this loan. The interest rates are low hence, the loan can be repaid in an eased manner.
Forestry Loan
A tree-based farm can take a Forestry loan for doing agricultural activities.
Horticulture Loan
Farmers indulged in horticultural activities can take this type of loan and get themselves a loan that is low in interest rate and can be greater in profits.
How to Apply for Agricultural Loan?
The following are the steps that you can follow to apply for the agricultural loan-
- The very first step is to consult the bank and ask for the best interest rate offered by them on your profile and evaluate the best rate which is lower in interest. At least ty 3-4 banks, if possible ask fellow farmers or village head for help
- Now, after selecting the bank, you’ll have to visit the bank branch along with the documents mentioned below and ask the bank representative for the application form
- After getting the application form, you’ll have to fill out the application form and attach the documents mentioned below
- After that, your request will be reviewed and further you’ll get a communication from the bank regarding your loan like interest rate, tenure, etc.
- Upon confirmation, you’ll get the loan amount sanctioned into your bank account
Documents Required for Agricultural Loan
The following are the documents required for an Agricultural loan-
- Duly filled application form
- KYC documents- Aadhaar Card, PAN Card, etc.
- Land/asset documents
- Security PDC
- Any other document mandated by the lender
FAQ
The Agricultural Loan comes with both Floating and Fixed Interest rates depending on the bank and what it has offered you. You can negotiate and get your interest rate as per your needs.
For loans to get processed and sanctioned, it may take at least a week, some banks also make loan processing faster depending on the bank.
Yes, you can take Agricultural Land for purchasing land for Agricultural use.
Yes, you need to provide a security guarantee for Agricultural Land, however, any loan amount less than Rs. 1 Lakhs/- can be exempted from providing any guarantee.
Yes, you can foreclose your Agricultural loan easily by paying your entire principal along with the foreclosure charges.
