India is an Agricultural country. It stands second in agricultural business all over the world. Farming equipments play a very important role in the optimum functioning of the farms. To boost up to the agricultural sector government has decided to provide maximum help to farmers in their profession. To help and get these in the fastest possible way, banks offer funding for farm equipments with a customised repayment option based on harvest patterns.

Before selecting your farm equipment loan

Eligibility

Almost many public sector banks as well as private sector banks lend farmers for purchasing farm machinery where tangible assets are created. Farmers who owns a piece of land in his name is eligible for a farm equipment loans. Applicant should be minimum 21 years to maximum 75 years of age. Before applying for the loan one should check on the eligibility criteria.

Loan Amount

Most banks fund up to 90 % on the value of the equipment purchased. But the Loan to value (LTV) ration depends on various factors such as customer profile, years in farming business, age, past repayment track if any, monthly outgoings, etc. Check with different banks their lending criteria so that you can compare and analyse and then apply for loan as per your requirements.

Rate of Interest

Banks lends farm equipment loans @10.70 % to maximum 15% p.a. The rate of interest charged solely is discretion of the bank. This depends on the credit assessment parameters of the bank. Some banks offers special harvesting schemes to the farmers. Better to cross check on the rate factor with various banks so that you get the best and the lowest rate in the market.

Repayment options

Unique repayment options are offered to applicants toward their farm equipments loan. You can repay your loan comfortably within 3 to 7 years on monthly, half yearly or yearly basis as per your convenience. The frequency permitted in particular cases will vary according to the product variants. Check on the best possible repayment option offered by various banks as you can repay your loan as per your harvest seasons.

Processing fees and other charges

Banks charges 1 % of the loan amount towards the processing fees. This fee is non refundable. Also, keep in mind that paying the processing fee does not mean that your loan is sanctioned. The other charges such as prepayment penalty, penal interest, late payment fee, etc are also levied by the bank. You need to also consider these charges before finalise your lender bank.

Bank Branch located and door step service

Most bank branches are located in upcountry and rural areas where these villagers usually live. Branches in rural / semi urban branches which are located cater to the requirement of finance from buyers of tractors, harvesters and various other farm equipments which are deployed both for agricultural and commercial purposes. Door step facility is provided by most banks in this competitive market to give maximum privilege to its customers. Doorstep service is provided to the farmers. It’s quick and hassle free process and excellent after sale service are the key features of various banks. You should opt for a bank which gives you prompt pre and post disbursement services, so that you can easily continue your repayment with your lender bank.

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