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Know About Agricultural Loan in India

Updated on June 20, 2024 , 148800 views

Agriculture is one of the main occupations in India. Farmers can apply agri loan for investment as well as short tenure purposes, such as production, etc. There are many financial institutions and banks in India that provide farm loans so that farmers can run their agriculture more efficiently.

agricultural loan

It helps to cover costs associated with running a farm, such as the purchase of seeds, pesticides, fertilizers, irrigation water and more.

Leading Banks for Agricultural Loan

There are many leading banks in India Offering exceptional credit in agriculture-related sectors.

1. SBI Agricultural Loan

SBI has helped millions of farmers across the country. The Bank is considered as one of the top lenders in providing farm loans. They offer a variety of loan, such as -

  • Kisan Credit Card

    The KCC provides short-term loans for farmers at the rate of 4%. If an individual opts for an SBI agricultural loan, then you’ll also get a free atm cum debit card. You can get a loan up to Rs. 3 lakh at an interest rate of 2% p.a.

  • Gold loan

    You can avail loan for the agricultural purpose with the help of gold ornaments. These loans come with an attractive interest, also the process is easy and hassle-free.

  • Debt swapping scheme

    It help framers to clear their dues. The main goal of this scheme is to help farmers become debt-free.

2. HDFC Bank Agricultural Loan

HDFC bank offers a variety of crop loans to farmers. The purpose of the agricultural loan is to offer a broad spectrum, right from the beginning of the installation of orchards.

HDFC bank also offers warehouse Receipt financing to all farmers.

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3. Allahabad Bank Agricultural Loan

Allahabad Bank is another nationalised bank in India that offers the Kisan credit card under its Akshay Krishi Scheme. The main objective of the scheme is to provide sufficient financial support to the farmers. Similar to State Bank of India, Allahabad Bank offers other services such as warehouse receipt financing, debt swapping scheme etc.

4. Bank of Baroda Agricultural Loan

Bank of Baroda is another leading bank which offers loans for agricultural purposes. They have various schemes that cover various sectors in the agriculture sector. For example, you can take the loan to purchase agricultural vehicles and heavy machinery for farming. Apart from this, the Bank also offers Capital and funds for setting up units or running a dairy, pig farms, poultry sericulture, etc. The bank also provides four-wheeler loans with a maximum amount of Rs. 15 lakh.

Agricultural Loan Interest Rates 2024 in India

Agriculture loan in India attracts low-interest rates. The processing fees for the agriculture loan is as low as 0% to 4% of the loan amount.

Here's the list of agriculture loan interest rate from major banks in India-

Bank Name Interest Rate Processing Fee
ICICI Bank (Agri Term Loan) 10 % to 15.33% p.a Up to 2% of offered limit at the time of payment
Central Bank of India (Cent Kisan Tatkal scheme) 8.70% p.a onwards Up to Rs. 25000- Nil, Above Rs. 25000- Rs. 120 per lakh or maximum Rs. 20,000
HDFC Bank (Retail Agri Loans) 9.10 % to 20.00% p.a 2% to 4% or Rs.2500
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. 25000-Nil
Karuru Vysya Bank (Green Harvester) 10.30% p.a As per lenders terms and conditions
Andhra Bank (AB Kishan Rakshak) 13.00% p.a As per lenders terms and conditions
Canara Bank (Kisan Suvudha Scheme) 10.10% p.a As per the lender’s terms and conditions
UCO Bank (UCO Kisan Bhoomi Vridhi) 3.10% to 3.50% Nil up to 3 lakh

Types of Agricultural Loan

There are common types of agricultural loans in India are offered by the banks are:

  • Crop Loan/ Kisan Credit Card
  • Agriculture Term Loan
  • Agriculture Working Capital Loan
  • Farm Mechanisation Loan
  • Agricultural Gold Loan
  • Horticulture Loan
  • Forestry Loan
  • Loan for various activities

How to Apply for Agricultural Loan?

Before applying for an agricultural loan, you must double-check the loan plan. Ensure you read all the Terms & Conditions of the policy and submit the necessary documents asked by the lender. There are some institutions and banks which offer online services too. In this case, you just need to properly navigate to the lender’s website. Enter all the details asked by the website and upload all the necessary documents. The loan lender will review your application. After the review & verification is completed, the lender will sanction your loan.

Purposes of Agricultural Loan

  • You can avail of agricultural loans for farming equipment and tools.
  • Individuals can avail the loan for the purchase of land.
  • Horticulture projects can also be one of the purposes to avail the agricultural loan.
  • You can apply for the loan for the purchase of a vehicle to carry out your agricultural activities efficiently.
  • For establishing a dairy unit this loan can be availed.
  • Individuals establishing a poultry unit can also avail this loan.
  • You also avail this loan for seasonal requirements.
  • Fisherman can also avail this loan for fishing purposes.

Benefits of Agricultural Loan

  • The key benefit of Agricultural loan is that you will not have to submit a bunch of documents. The loan can be procured with a handful of documents with valid identity proof, address, etc. You will have to submit these documents along with the filled application form.

  • Usually, framing loan is processed and approved quickly as compared to other loan products. As soon as your application is approved, the amount will be transferred to you.

  • There’s always competition within banks when it comes to the rate of interest, so you will easily get a loan with a low-interest rate. A low rate helps in repaying the loan without any burden. Some of the financial institutions provide the loan with an interest rate of 8.80% per year.

  • There are various tenure terms provided by lenders. They provide flexible terms as per your convenience and repayment ability.

Eligibility Criteria for Agriculture Loan

The eligibility criteria for a farm loan vary bank to bank, and also on the types of loan you opt for. Generally, the eligibility criteria are as follows:

  • An individual applying for an agriculture loan must be between 18 to 70 years of age
  • Individuals will need to provide assets as security to the lender once the loan is approved.
  • You can apply for a loan as a single holder or a joint holder, depending on the Terms and Conditions of the loan.

Documents Required for Agricultural Loan

The documents required for an agricultural loan may vary from bank to bank, but typically, the following documents are required:

  • Application form
  • Proof of identity (aadhaar card, PAN Card, Voter ID, etc.)
  • Proof of address (Aadhaar Card, Voter ID, etc.)
  • Proof of Income (Income Tax Returns, bank statement, etc.)
  • Proof of agriculture land ownership or Leasehold rights
  • Loan application form
  • KYC documents
  • Asset documents, which will act as security for the loan
  • Security PDC (Post-dated cheque)

If some other documents are asked by the lender, then you must produce them at the time of loan application

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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