MyLoanCare is a FREE of cost service for borrowers

Get Cashback of Upto ₹ 1,000* on Personal Loan Apply Online

MyLoanCare Customer Ratings - 4.5/5.0

Menu

Agriculture Loan

Agriculture Crop Loan Details

Last Updated 30th Oct 2020

  • Agriculture loan is a loan facility offered to people employed in the agriculture sector to carry out agricultural activities.
  • Agriculture loan is offered to loan borrowers in various forms such as Crop loan, Agriculture term loan, Loan for allied agricultural activities, Farm Mechanization loan, Solar pump set loan, Agriculture gold loan, Horticultural Loan and Forestry loan.
  • Agriculture farm loans are offered by various banks, financing institutions and Government-funded agencies.
  • Agriculture loan interest rate begins at 7.25%.
Apply for Personal Loan @ 10.45%* Get upto ₹ 1,000* Cashback Or Free Corona Health Insurance Cover of up to ₹5 lakh
*Insurance Details

Agricultural Loan

Agriculture loan, or as popularly called Krishi loan, is a loan facility offered to people employed in the agriculture sector to carry out agricultural activities such as purchasing agricultural land, purchasing farming and irrigation machinery, and for purchasing fertilizers and seeds, among others. The fund attained through agriculture crop loans can be used for harvesting, ploughing, sowing, weeding, or transportation of agricultural products. The loan is offered by lending institutions such as Banks, financing companies or Government-funded agencies.

Types of Loans in Agriculture

The agricultural loan is offered to loan borrowers in various forms as listed below:

  • Crop Loan: Crop loan, also called as Kisan Credit Loan or Retail Agri Loan is a go-to retail loan for agriculturalists to fulfil short term credit needs. The loan is offered through a Rupay card called Kisan Credit Card. The card can be used to withdraw funds from an ATM on a regular basis, and thus it is ideal to fulfil day to day agricultural costs.
  • Agriculture Term Loan: Banks offer pre-approved loans to the existing customers by doing a check on their credit score and repayment eligibility. Thus, they provide loans at a competitive rate of interest which are less than the usual personal loan interest rate.
  • Loan for Allied Agricultural Activities: Agriculture crop loan is offered as loan for allied agricultural activities to agriculturists looking out to fulfil working capital requirements. In addition to that, this loan can also be used to plan out long term investment options.
  • Farm Mechanization Loan: A pre-approved personal loan can be easily availed sitting at the desk of your house in a real quick time. Most of the lending institutions provide the facility to fill and submit the application form along with the necessary documents through mobile application or website of the banks.
  • Solar Pump Set Loan: This loan is offered to the agriculturists involved in small agriculture projects, to enable the purchase of photovoltaic pumping systems. The loan is offered with a repayment tenure of up to ten years to ease out the prepayment of the borrowed amount.
  • Agricultural Gold Loan: Agricultural gold loan is a secured loan that can be availed by farmers by pledging their gold. The loan is offered on a lower interest rate and is ideal for arranging funds in times of need.
  • Horticultural Loan: Horticultural Loan is an agriculture farm loan offered for land development projects related to orchids or vegetable farms. The loan can be used to cover expenses such as fencing, setting up boundaries, and clearing wild plants and trees amongst others.
  • Forestry Loan: Forestry agriculture crop loan is offered for maintenance and raising of crops growing on trees. This loan is a multipurpose loan and can be used for converting barren fields into farms, for creating irrigation channels, or for clearing wild growth in the farms.

Agriculture Loan Interest Rate

Agriculture loan interest rates may vary across the agriculture loan scheme. However the lowest rates of some of the top lenders is listed as follows:

Bank Rate Of Interest
SBI 7.25% onwards
ICICI Bank 9.35% onwards
Central Bank of India 10.25% onwards
Union Bank of India 7.30% onwards
Axis Bank 8.85% onwards

Schemes For Agriculture Loan

Some of the agriculture loan schemes provided by top providers are:

  • Kisan credit Card
  • SBI Drip Irrigation Loan
  • SBI Combine Harvester Loan
  • ICICI Retail Agriculture Loan
  • ICICI Long term Agriculture Loan
  • Cent Kisan Tatkal Scheme
  • Cent Vermicompost Scheme
  • Cent Solar Water Heater Scheme
  • Kisan Credit Card
  • Union Bank Crop Loan
  • Union Gold Loan
  • Union BioGas Loan
  • Axis Kisan Power
  • Axis Kisan Matsya
  • Axis Kisan Matsya

Eligibility Criteria for Agriculture Loan

In order to avail the agriculture loan, borrowers are required to meet certain eligibility criteria, as listed below:

  • The age of the applicant must be 18 to 70 years of age.
  • Borrowers can apply for an agriculture loan either individually or jointly.
  • Agriculture loan applicants are required to own a piece of land or have access to land for undertaking agricultural activities.

Documents Required for Agriculture Loan

Apart from meeting the agriculture loan, one is also required to fulfil the documentation. List of documents required to avail an agriculture loan are:

  • Agriculture loan application form
  • Identity proofs such as Aadhar cards, driving license, voter ID card and passport.
  • Address proofs such as utility bills, aadhar card, PAN card, and bank passbook, among others.
  • Ownership, lease letters or permission letters of the agriculture land.
  • Security post-dated cheques

Features of Agriculture Loan

Some of the features of agriculture loan are listed as follows:

  • Agriculture loan can be availed with minimal documentation.
  • The interest rates on agriculture loans are affordable and begin at 7.25%.
  • Agriculture loan comes with the facility of convenient repayment schedules as per the borrower’s preference.
  • Agriculture loans can be both secured and unsecured, depending upon the eligibility of the applicant and the loan amount.
  • Agriculture loans can be borrowed for both short term and long term financial need.

Things to Consider While Applying for Agriculture Loan

It is important to keep certain things in mind while applying for an agriculture crop loan, as listed below:

  • Ensure meeting all the eligibility and documentation criteria.
  • Ensure maintaining a good repayment history and off regular EMIs and credit card bills.
  • Avoid applying for agriculture loans at multiple places.
  • Maintain a low Fixed Obligation to Income ratio, by ensuring that the EMIs do not eat up a large part of your monthly income.

Union Budget Allocation to Agriculture 2020-2021

As per the union budget of 2020-2021, the finance ministry allotted funds worth Rs 1.42 crore to the Ministry of Agriculture and Farmer’ welfare. Based on this allocation, there have been various proposed initiatives for the betterment of the agricultural sector, as listed below:

  • For the year 2020-2021, Agriculture credit target has been set to ₹ 15 Lakh crore.
  • Milk processing capacity to be doubled by 2025.
  • PM Kusum initiative plans to cover ₹ 20 Lakh and ₹ 15 Lakh framers for standalone solar pumps and grid-connected pumps, respectively.
  • National cold supply chain to be facilitated with “Kisan Rail” and “Krishi Udaan” via Indian railways and civil aviation.
  • 200 tons of fish production target by 2022-2023.
  • Schemes such as self-help groups to be launched in villages.
  • Artificial insemination coverage to be increased to 70%.
  • e-NWR initiated to be integrated into e-NAM.

FAQs

How many types of agriculture loans are there?

Agriculture loan is offered to eligible agriculturalists in various forms such as Crop loan, Agriculture term loan, loan for allied agricultural activities, Farm Mechanization loan, Solar pump set loan, Agriculture gold loan, Horticultural Loan and Forestry loan.

How can I get a Kisan Loan?

You can apply for a Kisan loan by applying it online or offline to any of the agriculture loan lenders. However, to get a loan, it is important to meet the eligibility and documentation criteria.

What is the crop loan system?

Crop loan, retail loan facility for fulfilling short term credit needs. The loan is offered through a Rupay card called Kisan Credit Card. The card can be used to withdraw funds from an ATM on a regular basis, and thus it is ideal to fulfil day to day agricultural costs.

What is Krishi Loan?

Krishi or agriculture loan is a credit facility for people employed in the agriculture sector to carry out agricultural activities such as purchasing agricultural land, purchasing farming and irrigation machinery, and for purchasing fertilizers and seeds, among others.

How can I get an agriculture loan from SBI?

You can get an agriculture loan from SBI by visiting your nearest SBI branch or by applying it online at the bank’s website.


*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More