Agriculture loan is a credit facility which is used by the farmers to meet the farming, cultivation, irrigation and working capital requirements for agriculture and other agri-associated activities.
In India, all the major banks such as public/ government banks, private banks, co-operative banks and gramin banks offer agricultural loans to farmers at attractive interest rates. Farmers, dairy owners, horticulturists, and any orchard owners are eligible to apply for an Agriculture Loan.
Among them, many banks offer Retail Agri Loan in the form of "Kisan Credit Card" which is a customised credit card designed for farmers to get immediate credit without any hassle to cover up fund requirements of their day-to-day farm related activities.
Banks also extend long-term credit for agriculture & allied activities to cover larger expenditure such as buying agriculture equipment, cattle etc.
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In India, Agriculture Loan has following purposes:
Following eligibility criterion is required for availing Agricultural Loan from any bank in India:
Following basic documents are required for getting Agricultural Loan in India:
Various Types of Agriculture Loan
There are variety of agriculture loans available which cover almost all the funds requirements related to different agricultural activities. You can choose any type of agriculture loan according to your needs.
Flexible Loan Repayment Term
Agriculture loan is available for short term as well as for long term. Short term loans are referred to as "Cash Credit" and long term loans are called "Term Loans". Short term loans are availed for less than 1 year while long term loan ranges for a period from 5 to 15 years which are offered by the banks on the basis of your earnings and repayment capacity.
No Hidden Charges
You will get the information about all the charges involved in agriculture loan before-hand by the lending bank. These charges are other than the loan interest rate. These charges include the processing fee, foreclosure charges, etc. Therefore, there are no hidden charges involved in case of agriculture loans.
After you submit the loan application along with required documents, lending bank will verify your application. If all the things are found correct, your loan application will be approved by the bank and you will be informed about the same. The loan amount will be released soon after the approval.
The interest rate on agriculture loan ranges from 8.80% to 12.50%. These rates also differ from lender to lender. Some of other significant factors in determination of interest rate are income of applicant, repayment capacity, type of loan applied for and past credit history of the applicant.
The repayment tenure differs from lender to lender. In case of cash credit, it is usually less than 1 year and for long term loans, it varies from 3 to 9 years. There are various flexible loan repayment options available to repay the loan such as monthly, half yearly and yearly instalments, you can select any of them based on your income and repayment capacity.