The term agricultural loan is necessary to meet the working capital needs of farmers. A reliable flow of credit is crucial in the agricultural sector. However, agricultural loans in the country have a major drawback which is an 18 month repayment limit. Hence, term loans offer a longer repayment term which is 15 years to repay the amount. In addition, it is an initial investment for the conduct of agronomic activities.
Also, it helps to explore areas such as dairy farm, agricultural mechanization, irrigation, horticulture, animal husbandry, inland fisheries, etc. Moreover, it improves the livelihood of farmers by controlling the rate of interest and increasing the flow of credit. Additionally, RBI and NABARD regulate the whole scheme by lending and providing banking assistance. In addition, the supervision is extended, that is to say by integrating several cooperative, commercial and rural banks.
Budget- 2020 in favor of agriculture
- Over 11 lakh of institutional credit is allocated to agricultural sectors
- Government to provide Rs 10,000 crore for fisheries and livestock infrastructure development
- Adaptation of solar pumps to agricultural fields
- GrAMs and APMC will receive more than Rs 2000 crore
- Promote the establishment of haats to convey the importance of the agricultural sector
Need for agricultural term loan
The term agricultural loan helps farmers and therefore the agricultural sector considerably. With this in mind, the loan helps to
- Get materials for farming
- Purchase of land
- Horticultural activities
- Vehicles for the ease of cultivators
- Set up dairy and poultry units
- Working capital is easily accessible through the loan
- Fish farming aid
EMI for Agricultural Term Loan
Also, the cost of EMI for agricultural term loans compared to other loans is quite different. In this regard, there is an online EMI calculator that helps in calculating the candidate’s EMI. Moreover, it is quite simple as you only need to ask for information such as loan amount, term, interest rate and processing fee. Usually the interest rate is around 8.8% per annum. In addition to this, 2% of the total amount in the initial phase.
Main features of the plan
- The required documentation is simple.
- Very fast loan processing
- Low interest rate
- Variety of loan repayment options
- Hidden fees are zero
Eligibility for agricultural term loans
Farmers are encouraged to take advantage of the benefits of the scheme. They can range from small growers to large scale. In addition, the candidate can be between 18 and 70 years old. Apart from that, the applicant can issue loans individually or in collaboration.
Type of aid
Margin for agricultural term loans
At loan time, margin money is essential. For example, for loans above Rs 10,000, the margin is 15% to 25%. On the contrary, no margin for a loan below Rs 10,000.
Collateral Security for agricultural term loans
- For the creation of movable property: Up to Rs 25,000, pledge of property. However, beyond this, a land mortgage or a guarantee by a third party will be required.
- No movable property: up to Rs 10,000, pledge of property with DPN or land agreement. In the event of a loan greater than Rs 10,000, a land mortgage or a guarantee by a third party is compulsory.
Documents needed to receive an agricultural term loan
- Application form
- KYC documents
- Security PDCs
- Land documents
- Documents specifically requested by the lender
Apply for an agricultural term loan
It is important to find out which banks offer agricultural term loans. After comparison, the applicant can choose the most suitable bank closest to him. Then you have to go to the respective bank taking all the documents. In addition, a manual application will be given to complete and submit.
In another case, several banks allow online application via their website. Accordingly, click on apply now and fill in the details. Additionally, submit the documents.
Regardless of the type of applicant, the lender will check and update the details from time to time. In addition, following approval, the amount will be transferred to the applicant’s account.