Banks, Microfinance organizations, and governmental organizations offer agricultural loans to support India’s agricultural sector’s expansion. These loans can finance farms, such as the purchase of land, the upkeep, and purchase of farm machinery, the construction of projects like land purchases, the maintenance or purchase of farm machinery, the building of grain storage facilities, irrigation channels, and more.
Features of a Loan on Agriculture Land
- End-use Flexibility: An agricultural loan can assist in managing operating costs and other associated farm-related costs, such as buying new land or livestock.
- Options Collateral: Agricultural loans can be secured or unsecured, depending on the loan amount and applicant’s profile.
- Various types: There are several agricultural loans, depending on their intended purpose and repayment period.
- Minimal Documentation: A small amount of documentation is generally required to obtain an agricultural loan.
Agriculture Loan Program Eligibility
Agri-loans are available to sharecroppers, tenant farmers, oral lessees, and small and marginal farmers.
Application for a Loan for the Purchase of Agricultural Land: Required Documents
Loan applications for agriculture only require a small amount of paperwork. Agriculture loan applications only need a small amount of paperwork. Here are a few instances:
- Photo
- Address
- All farmers get a type of credit card called a Kisan.
- Land ownership documentation, money receipts, a list of rights, etc.
Loan Programs for Agriculture
- Agriculture Term Loans: These are long-term, up to 48-month loans provided by different lenders to cover year-round agricultural expenses. The loan funds can help with new equipment or gadget improvements and building solar and wind power systems. Banks typically offer a repayment period of three to four years for this loan, allowing you to repay the borrowed amount over your choice of monthly, biannually, or yearly installments.
- Buying new machinery, fixing or replacing old machinery, or purchasing tractors, harvesters, or other agricultural equipment are all possible uses for a farm mechanization loan. While some banks provide general-purpose loans, others divide them into categories to their intended use.
- Crop Loan or Kisan Credit Card: A Kisan Credit Card or Kisan Crd is a suitable agricultural loan option for short-term credit requirements, such as crop cultivation costs, post-harvest activities, and farm equipment maintenance. Farmers can use the card, which is typically available as an electronic RuPay Card, to withdraw money from ATMs and make the required purchase. It provides accessible loans as a result to meet your regular farm needs.
- A loan for allied agricultural activities is available to farmers to meet their short-term working capital and long-term investment needs.
- Farmers may apply for an agricultural gold loan in return for a pledge of gold jewelry. Loans may be available for farming activities besides just growing crops. Due to this low-interest loan, farmers can access the value of their gold jewelry, which usually sits unused in their homes or bank lockers.
- Loans for forestry serve to cultivate crops that are grown on trees. This machine can clear overgrowth, convert arid land into arable land, install irrigation channels, and prepare the land for cultivation.
- Loan for Horticulture: This type of loan for agriculture is to clear land for orchards or vegetable farms, cut back on overgrowth or stray trees, carry out small irrigation projects, build fences or walls, and other horticultural activities.
Who Qualifies for an Agricultural Loan?
- The minimum and maximum ages are 18 and 65, respectively.
- Indian citizen without a criminal record.
- There should be land available for farming.
- Must not have had any prior loan defaults.
Required Documents for a Loan to Purchase Agricultural Land
Most lenders require the following documentation before approving an agricultural loan:
- Completed application form.
- Kisan Credit Card.
- Passport size picture.
- You can use utility bills, voter identification, Aadhar cards, and other documents as address proof.
- Other forms of identification, such as a voter ID, PAN, Aadhar card, or ration card, are also acceptable.
- ITRs, other tax returns, and bank statements are examples of income documentation.