Agricultural loan is offered by traditional lenders such as banks as well as dedicated government agencies to facilitate various agricultural activities. The loan can be availed by farmers to finance agricultural projects such as to purchase new land, upgrade or buy new farm machinery, construct irrigation channels, build grain storage sheds, etc. The following sections discuss key aspects of an agricultural loan, including various features, interest rates, types of agricultural loans and more.
Features of Agriculture Loan
- End-use Flexibility: Agricultural loan can be availed to meet a variety of expenses related to farm activities, such as to purchase new farmland/ cattle or to manage the operating costs and other allied activities.
- Various Types: Several types of agricultural loan exist on the basis of end use as well as the repayment tenure.
- Minimal Documentation: Generally, the agricultural loan can be availed with simple and minimal documentation.
- Collateral Optional: Both secured and unsecured agricultural loans are offered on the basis of loan quantum and applicant profile.