Agriculture Loan Interest Rate in India can vary depending on factors such as the type of loan, loan amount, loan tenure, and lender policies. However, checking with the lender for the latest interest rates and loan terms and conditions is always advisable. Here are some of the typical interest rates for agriculture loans offered by various lenders in India, as of my knowledge cutoff in 2021.
- Crop Loan: Interest rates typically range from 7% to 10% per annum, depending on the loan amount and tenure.
- Kisan Credit Card: The interest rates on Kisan Credit Card loans range from 7% to 10% per annum.
- Farm Mechanization Loan: The interest rates on farm mechanization loans can range from 9% to 12% per annum.
- Land Purchase Loan: Interest rates on land purchase loans can range from 8% to 12% per annum, depending on the loan amount and tenure.
- Agri-Term Loan: Interest rates on agri-term loans can range from 8% to 12% per annum, depending on the loan amount and tenure.
It’s important to note that many lenders offer lower interest rates on agriculture loans to promote and support agriculture and rural development in India. The government of India also offers various schemes and subsidies on agriculture loans to support farmers and agriculture-related businesses.
Agriculture Loan Interest Rate in India List
| Loan Type | Interest Rate Range |
|---|---|
| Crop Loan | 7% to 10% per annum |
| Kisan Credit Card | 7% to 10% per annum |
| Farm Mechanization Loan | 9% to 12% per annum |
| Land Purchase Loan | 8% to 12% per annum |
| Agri Term Loan | 8% to 12% per annum |
It’s important to note that many lenders offer lower interest rates on agriculture loans to promote and support agriculture and rural development in India. The government of India also offers various schemes and subsidies on agriculture loans to support farmers and agriculture-related businesses.
Eligibility criteria for agriculture loans
The eligibility criteria for agriculture loans in India can vary depending on the type of loan, lender policies, and other factors. However, here are some general eligibility requirements that are typically expected from borrowers:
- Age: The borrower must be at least 18 to be eligible for an agriculture loan.
- Type of Business: The borrower must be engaged in agriculture-related activities, such as farming, livestock rearing, fishery, poultry farming, etc.
- Credit Score: Most lenders require a good credit score of at least 650 to approve agriculture loans.
- Income: The borrower must have a steady source of income, either from agriculture-related activities or other sources of income, to repay the loan.
- Land Ownership: Some lenders may require the borrower to own agricultural land to be eligible for certain agriculture loans.
- Documentation: The borrower must provide all necessary documents, such as land records, proof of identity, address proof, etc., per the lender’s requirements.
It’s important to note that these are general eligibility criteria, and the specific requirements may vary depending on the lender and the type of loan. Additionally, borrowers should check with the lender for the latest eligibility criteria and loan terms and conditions.
Features and Benefits of Agriculture Loan
Agriculture loans are specifically designed to meet the financial needs of farmers, agricultural businesses, and rural entrepreneurs. These loans provide various features and benefits that help grow and develop agriculture-related activities. Here are some of the key features and benefits of agriculture loans:
- Customized Loan Amount: Agriculture loans offer customized loan amounts based on the borrower’s specific financial requirements, ensuring that the borrower has access to the required funds.
- Competitive Interest Rates: Most agriculture loans have lower interest rates than other loans, making them an affordable option for farmers and agricultural businesses.
- Flexible Repayment Options: Agriculture loans offer flexible repayment options based on the borrower’s cash flow and income, helping borrowers manage their finances better.
- Multiple Loan Types: There are several types of agriculture loans, such as crop loans, land purchase loans, farm mechanization loans, etc., allowing borrowers to choose the type of loan that best suits their needs.
- Collateral-Free Loans: Many lenders offer agriculture loans without any collateral, making it easier for farmers and small rural entrepreneurs to avail of loans without the burden of additional security.
- Government Subsidies: The government of India offers various subsidies and schemes for agriculture loans, helping farmers and rural entrepreneurs to get loans at lower interest rates and better repayment terms.
- Promotes Rural Development: Agriculture loans help promote rural development and economic growth by providing access to funds for agriculture-related activities, which, in turn, creates more job opportunities in rural areas.
Overall, agriculture loans are a valuable tool for farmers, agricultural businesses, and rural entrepreneurs to finance their activities and achieve their goals. The features and benefits of agriculture loans make them an accessible and affordable financing option for those engaged in agriculture and related activities.
FAQ’s
Which bank gives long-term loans to farmers?
Several banks in India offer long-term loans to farmers. Here are some of the top banks providing long-term loans to farmers:
1. State Bank of India (SBI)
2. Punjab National Bank (PNB)
3. ICICI Bank
4. Axis Bank
5. HDFC Bank
These banks offer long-term loans for different agriculture-related activities, such as land purchase, farm mechanization, crop cultivation, and allied activities.
How to get free land from the government in India?
Getting free land from the government in India is impossible as the government only provides land at subsidized rates or leasehold basis. However, the government offers various schemes and programs to support landless farmers and promote agriculture. Some of the popular government schemes are:
1. Pradhan Mantri Fasal Bima Yojana (PMFBY)
2. Pradhan Mantri Krishi Sinchai Yojana (PMKSY)
3. Rashtriya Krishi Vikas Yojana (RKVY)
4. Pradhan Mantri Kisan Sampada Yojana (PMKSY)
5. National Agriculture Market (eNAM)
These schemes provide various benefits, such as crop insurance, irrigation facilities, cold storage infrastructure, and marketing support to farmers.
Why do farmers need to borrow money?
Farmers often need to borrow money to meet their farming and personal expenses. Some of the common reasons why farmers need to borrow money are:
1. To purchase seeds, fertilizers, and other inputs required for crop cultivation
2. To buy farm equipment such as tractors, harvesters, and irrigation pumps
3. To meet expenses related to animal husbandry, such as purchasing livestock, feed, and veterinary care
4. To cover their expenses such as education, healthcare, and marriage
5. To invest in agriculture-related businesses such as agro-processing and value-added activities.
Borrowing money enables farmers to overcome their financial constraints and meet their farming and personal needs, contributing to the growth and development of the agriculture sector in India.
Conclusion
Agriculture is a vital sector of the Indian economy, and agriculture loans play a crucial role in supporting farmers and rural entrepreneurs. Agriculture loans offer affordable financing options for agriculture-related activities and promote rural development, economic growth, and job creation in the rural areas of India.
The interest rates for agriculture loans in India vary depending on the type of loan, lender policies, and other factors. However, many lenders offer competitive interest rates and flexible repayment options to make agriculture loans accessible and affordable to farmers and rural entrepreneurs.
Overall, agriculture loans provide various benefits, such as customized loan amounts, flexible repayment options, government subsidies, and collateral-free loans, making them an attractive financing option for those engaged in agriculture and related activities. Farmers and rural entrepreneurs can take advantage of agriculture loans to meet their financial requirements and achieve their goals, contributing to the growth and development of the agriculture sector in India.