Agriculture Loan 2025

Types of Agriculture Loans

Given below is the list of types of agriculture loans that you can avail for yourself:

1. Crop Loans - Crop loans, also referred to as Retail Agri Loans, help farmers cover short-term expenses related to crop cultivation, farm equipment maintenance, and post-harvest activities. Farmers receive a Kisan Credit Card (KCC) with this loan, enabling them to withdraw funds for essential farming purchases. 
   
2. Agricultural Term Loan - These are long-term loan schemes which a farmer can avail to meet their non-seasonal expenses. One can avail this loan to buy or upgrade equipment such as windmills, solar power, etc. The repayment tenure for such kind of loan schemes can go up to 4 years allowing the farmer to repay the amount in a convenient manner.
3. Solar Pump Set Loan - If a farmer is involved in small irrigation projects and requires capital to buy photo voltaic pumping system, then availing a solar pump set loan is the appropriate option. The repayment tenure for such loan schemes goes up to 10 years.
4. Loan for Allied Agricultural Activities - Farmers involved in allied agricultural activities can apply for such type of loans if they need to raise working capitals to meet their farming expenses.
5. Farm Mechanisation Loan - If a farmer requires working capital so that they can either purchase new farming machineries or upgrade their existing ones such as purchasing a new tractor or getting an old one repaired, then they can apply for these types of loan schemes.

Popular Agriculture Loan Schemes in India

1. Agricultural Gold Loan: The applicant can avail this type of loan by pledging their gold ornament as security. The loan amount can be used to meet various farming expenses such as buying machinery or to meet costs related to cultivation of crops. These loans are offered at a low interest rate and allow a farmer to use their gold which would otherwise stay idle.
2. Forestry Loan: Forestry loans are available to individuals growing crops on trees. These loans can fund activities such as converting barren land, establishing irrigation, and clearing wild trees. 
3. Horticultural Loan: Farmers involved in setting up vegetable farms and orchards can apply for a horticultural loan which not only allows them to meet the cost of managing such type of farms, but also helps in meeting the expenses related to other horticulture activities such as clearing wild trees, setting up fence, etc.

Top Banks Offering Agriculture Loans in India

How to Apply for an Agriculture Loan?

1. Step 1: Compare lenders and loan options online

1. Step 2: Apply via branch or official website

1. Step 3: Fill the form, submit required documents

1. Step 4: Await verification and approval

1. Step 5: Loan amount is credited to your account upon approval

Why Should You Take an Agriculture Loan?

A number of lenders today, offer a range of agriculture loans for the benefit of their customers. The various purposes for which you can avail an agriculture loan are as follows:

1. Purchase of farming machinery and equipment
2. Purchase of land
3. Horticulture projects
4. Purchase of vehicles
5. Establishment of dairy units
6. Establishment of small poultry units
7. For working capital needs
8. For seasonal requirements
9. For fish farming

Features and Benefits of Agriculture Loans

The key features and benefits of agriculture loans are as follows:

1. Simplified Documentation: When borrowing an agriculture loan, applicants will only have to submit a few documents such as a valid photo identity proof, proof of residence, etc. These documents can be submitted along with one's application form.
2. Quick Processing: Lenders will verify your application form and the documents submitted by you, after which your loan application will be approved. The loan amount will be disbursed to your account soon after this.

1. Competitive Interest Rate Charged: Banks and financial institutions that offer agriculture loans charge a competitive rate of interest that start as low as 8.80% p.a. Borrowing a loan with such a low interest rate can help you keep the overall cost of your loan down.
2. Loan Repayment Tenure Options: Many agriculture loan providers offer short- and long-term credit solutions. Thus, based on your financial requirements and repayment capacity, you can opt for a loan product that offers a suitable product term. 
3. No Hidden Charges: When you borrow an agriculture loan, you may need to pay other charges such as the processing fee, pre-payment charges, etc. However, lenders will usually inform prospective borrowers about the various charges that they may have to pay for before the loan is borrowed.

Documents Required for Agriculture Loans

The documents that you may be asked to submit at the time of applying for an agriculture loan are as follows:

1. Duly filled application form
2. KYC documents
3. Land/asset documents
4. Security PDC
5. Any other document mandated by the lender

Eligibility Criteria to Borrow an Agriculture Loan

The eligibility criteria to borrow an agriculture loan will vary based on the type of loan scheme that you opt for. The generalised eligibility criteria, however, are as follows:

1. The applicant must be between 18 and 70 years.
2. The individuals will have to own the necessary assets, which will need to be hypothecated to the bank once the loan is borrowed.
3. Loans can be applied on an individual basis or joint basis, based on the lender's terms and conditions.

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