How to get loan on agricultural land?

To know how to get loan on agricultural land in India, you must approach a bank or financial institution that offers loans secured by farmland. Here are the steps you should follow:

• First, ensure you own clear land title documents such as a sale deed, title deed, Patta, revenue records, and tax receipts; these establish ownership and are essential for eligibility.

• Most lenders require you to be 18 to 65 years old and have a good credit history and financial capacity to repay. Some banks also consider farming experience or income proof, especially when the land itself generates agricultural income. So, you must choose the right lender.

• Next, visit a bank branch or lender and fill out the loan application. You must provide accurate details about the land, its size and value, your identity and address proofs, and income documents like ITR or bank statements.

• The bank will order a land valuation through an internal or registered valuer to determine how much credit they can sanction; typical loan amounts depend on land value and the lender’s policy.

• If your agricultural land meets the criteria, the lender reviews your eligibility, documents, and valuation before deciding on approval. 

• Once approved, sign the loan agreement outlining the interest rate, sanction amount, and repayment schedule; then the funds are disbursed to your account.

Many lenders restrict the use of funds to agricultural or rural development purposes. Failing to repay can lead to land seizure since the loan is secured by the land. Some government-linked schemes and priority sector loans also provide subsidies or lower interest rates for eligible farmers. This is all about how to get loan for agriculture land purchase.

.

To cultivate crops farmers had to pay a huge amount of money.  At times, they cannot even make a profit through agricultural activities, therefore, they have a hard time paying their debt. Due to the high cost of manure, lack of water, and high production cost the farmers face difficulty in cultivating crops. The worst that happens to a farmer is when he takes a loan with a high interest from a private lender. There is a misconception that banks do not offer loans on agricultural land. Let me burst the bubble today, to give you some good news! Many banks in India have come up with schemes to help a farmer obtain a loan on agricultural land. I will share with you the details on how to get loan on agricultural land from different banks.

How to take loan on agricultural land: Eligibility Criteria

To learn how to take loan on agricultural land you need to know the eligibility criteria. I will provide the pointers below:

• Farmers, dairy owners, horticulturalists, and orchard owners are eligible to get loan on agricultural development.

• The minimum eligibility criteria for agricultural loan is 18 years. However, bank lenders prefer ages between 24 to 65 years.

• You can't secure  an agricultural loan without a co-applicant incase there are two landowners.

• The borrower must clear titles to the land to secure Agricultural loans.

• The borrower should have 2 years of residence stability.

• Loans are based on the size of the land. Therefore before securing an agricultural loan you must mention the size of the land.

• Filled up application form

• ID proof such as PAN card, Aadhar card, Voter card.

• Proof of address 

• Land documents which include registration document, utility bills, tax receipt.

• No due certificate

• Land sale agreement copy

• Last six months of bank statement ( if applicable)

• Passport size photo of the land owner

How to get loan on agricultural land?

Banks have different interest rates for agricultural loans. You can secure agricultural loans from IDBI, ICICI, or Union bank.

1. You need to go to the bank and take all the documents I have mentioned above.

2. Ask the bank manager for the application form

3. Fill the application form and submit the documents.

4. The bank will run a background check before lending the loan. 

5. After the verification you can obtain an agricultural loan.

How much loan can I get on agricultural land?

You need to visit many banks and look at the interest rates and decide from which bank you want to take the loan.It's better to discuss all the details and the interest rate before applying for the agricultural loan.

I will provide the interest rate of some banks below:

• Minimum Interest Rate

  - 10.50% p.a.

• Maximum Interest rate

  - 13.70% p.a.

• Mean Interest Rate

  - 11.55% p.a.

• Minimum interest rate - BBR+0.50%

• Average interest - BBR+0.50%.

• Minimum- BBR+0.50%

• Maximum-BBR+0.75%

• Average-BBR+0.63%

• Minimum- BBR+1.0%

• Maximum-BBR+1.25%

• Average-BBR+1.3%

I hope you know now how to get loan on agricultural land.