Farmers loan or Agriculture Loan for Farmers are types of loans which are for farmers who do agricultural & animal farming for a living. The loans can be provided to both seasonal and non seasonal types of farming through which the farmers would be able to buy the required products such as fertilizers, seeds and also use the loan money for yielding, transport and selling of the agricultural products to business and people to earn profit.
If you are a farmer in India, then you might be wondering which bank gives long term loans for farmers and more? If that is the case, then you can read our article below where we will be discussing types of loans in Agriculture and which Banks loan schemes are best for farmers.
Types of Loans in Agriculture for Farmers – Loan Scheme for Farmers
As a farmer you should first understand what type of loans in Agriculture are available for Farmers and what kind of interest rates or things to consider before choosing them.
In India, there are several types of loans available for farmers, including:
- Short-term crop loans: These loans are being used to pay for the planting and harvesting of crops.
- Medium-term loans: These loans are utilized to pay for purchases of agricultural machinery and infrastructure, such as irrigation systems and tractors.
- Long-term loans: These loans are for financing large-scale agricultural projects, such as setting up a dairy farm or a poultry farm.
- Margin money loans: Farmers are given access to these loans in order to satisfy the margin requirements for other loans.
- Kisan Credit Card (KCC): This is an agriculture credit card that can be used to purchase inputs including seeds, fertilizers, and pesticides.
- Interest Subvention scheme: This plan gives farmers who take out banks short-term crop loans up to Rs 3 lakhs an interest subsidy of 2%.
- Pradhan Mantri Fasal Bima Yojana (PMFBY) : This scheme ensures sustainable farmers against crop loss brought on by natural disasters.
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) : This course will give Indian small- and marginal-farmer households financial support.
These are some examples of the types of loans available for farmers in India, there may be other schemes and programs too that are periodically launched by the government.
Agriculture Loan Interest Rate by Type of Loan for Farmers
Before you decide to get a loan for your agriculture farming you should be aware of what are the average interest loans for farmers for agriculture.
- Short-term crop loans: The interest rate for short-term crop loans is usually around 7-9% per annum.
- Medium-term loans: The interest rate for medium-term loans is typically around 7-9% per annum.
- Long-term loans: The interest rate for long-term loans is generally around 7-9% per annum.
- Margin money loans: The interest rate for margin money loans is usually around 7-9% per annum.
- Kisan Credit Card (KCC): The interest rate for KCC is usually around 7-9% per annum.
- Interest Subvention scheme: The interest rate for this scheme is 2% per annum for short-term crop loans up to Rs 3 lakhs from the bank.
- Pradhan Mantri Fasal Bima Yojana (PMFBY) : The interest rate for this scheme varies as it is based on the Farmers insurance premium.
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) : The interest rate for this scheme is 0%.
These interest rates are subject to change, and actual rates may vary depending on the lending institution and the borrower’s creditworthiness. It’s always good to check with the bank for the most recent and accurate interest rate information.
Best Banks for Agriculture Loan for Farmers
You should always consider looking at different banks who provide agriculture loans to ensure that you find the best agriculture loan scheme for yourself. We have listed down the banks with their interest rates, processing fees and other details required.
|Bank/Institution||Interest Rate||Processing Fee||Prepayment Charges||Repayment Period|
|State Bank of India||7.00% – 7.50%||0.50% – 1.00%||N/A||Up to 7 years|
|ICICI Bank||7.00% – 8.00%||0.50% – 1.00%||N/A||Up to 7 years|
|HDFC Bank||7.25% – 8.00%||0.50% – 1.00%||N/A||Up to 7 years|
|Axis Bank||7.00% – 8.00%||0.50% – 1.00%||N/A||Up to 7 years|
|Union Bank of India||7.00% – 7.50%||0.50% – 1.00%||N/A||Up to 7 years|
- How do Bank Rates and Fees change due to Previous Loans
Please keep in mind that these rates and fees are subject to change and may differ depending on the type of loan, credit history, and other factors.
- Why are banks unwilling to lend loans to small farmers
I would like to point out that you should check with the bank for other conditions such as collateral security, margin, repayment schedule, and other such details could be the reasons why banks are unwilling to lend loans to small farmers.
- Which Loan is Best for Farming
Depending on your duration of Farming, the best loans for farming are Short crop loan, medium term loan and long term loan.
- How to apply for a Farmer Loan
You can apply to any bank or government institutions providing Farmers loans.
- How much Loan can a farmer take
The amount of loan for a farmer would depend on the farming that he has planned and verified by the Bank or Government Institutions giving you a loan.
- Who is eligible for Crop Loan?
Farmers who can provide the banks and government institutions that they are in need of loans for planting and harvesting of crops and should also provide necessary documents for verification of previous loans, credit history score and more as required.
- Which Bank is Best for Agriculture Loan
Though most banks have similar interest rates but it will also depend on your previous loans, current loans, credit history score. So, check with all the banks on what best interest rate for the loan would be provided to you and then make a decision to go with the bank with the lowest interest rate.