A "low interest" loan shouldn't mean you have very little interest in paying it back!
  • Loan Against Agricultural Land

    Farmers in India incur massive expenses while cultivating crops. Most of the time, they barely make profits and struggle to repay their debts. We have heard the cries of the agriculturists in India lamenting about the low prices they get on their produce, the high cost of manure, and lack of water.

    To continue farming, they land up borrowing from private lenders who charge a very high rate of interest which makes things worse. To help farmers in India by offering them financial aid when required, many banks in India offer agriculture loans.

    What is a Loan Against Agricultural Land?

    If a farmer has a piece of land in his/her name, that can be used as a collateral to obtain a loan from a bank or a financial institution. When a borrower pledges an agricultural land for money it is called as “Loan Against Agricultural Land” or “Agriculture Loan”.

    Features of Loan On Agricultural Land

    • Loan Against Agricultural Land is specially designed for people who cultivate crops like farmers, planters, or Horticulturists. It cannot be availed by a businessman or a professional.
    • Usually, the farmer does not have to furnish Income Tax Returns to apply for this type of loan.
    • It requires minimum documentation.
    • The loan tenure goes up to 20 years with many banks.
    • There are no hidden charges on Agriculture Loans.
    • The lender usually works out a flexible repayment plan considering the farmer’s situation.
    • The turnaround time is fast and the banks are sensitive to the harvest season.
    • The borrower can use the funds for agricultural purposes like food processing, buy an agricultural equipment, set up dairy units/fisheries/rice mills, or for micro-irrigation.
    • They can also use the funds to set up a greenhouse, cold storage, or a horticulture centre.
    • To buy agriculture insurance to protect from crop losses.
    • You can use the funds to buy livestock or cover your marketing and operating expenses.

    Eligibility Criteria for Loan Against Agricultural Land

    • Farmers, Dairy Owners, Horticulturists, and any Orchard owners are eligible to apply for an Agriculture Loan.
    • Most lenders prefer the age of the applicant to be within 24 to 65 years of age. However, there are few banks who offer loans to applicants are 18 years of age. The eligibility differs from one bank to another.
    • If the land is owned by two people, co-applicant is mandatory.
    • A agricultural land is pledged as a collateral. The borrower should have clear titles to the land to be eligible to apply for a Loan Against Agricultural Land.
    • Usually, lenders prefer borrowers to have residence stability of 2 years.
    • Most banks offer loans based on the size of the land pledged. They usually mention the minimum acres of land a farmer should have to apply for a loan.

    Interest Rate for Loan Against Agricultural Land

    The interest rate on agri loan differs from one bank to another. You will have to contact the bank directly to know the exact interest rate that will be charged. Some of the banks providing loan against agricultural land is given below:

    ICICI Bank- Agri Term Loan

    • Minimum Interest Rate- 10.50% p.a.
    • Maximum Interest rate- 13.70% p.a.
    • Mean Interest Rate- 11.55% p.a.

    Union Bank- Loan for Agribusiness

    Loan Amount Rate Of Interest
    Loan up to Rs.50,000 MCLR+ 0.10%
    Loans above Rs.50,000 to Rs.2 lakh MCLR+0.65%
    Loans above Rs.2 lakh to Rs.5 lakh MCLR+1.90%
    Loans above Rs.5 lakh to Rs.25 lakh MCLR+2.65%
    Loans above Rs.25 lakh to Rs.1 crore MCLR+2.90%
    Loans above Rs.1 crore You will have to contact the bank for the table.

    Canara Bank Agriculture Loans

    Loan Amount Rate Of Interest
    Loan up to Rs.3 lakh MCLR+ 1.40%
    Loans above Rs.3 lakh to Rs.1 Crore MCLR+2.30%
    Loans above Rs.1 Crore to Rs.2 Crore MCLR+2.30% to MCLR+3.50% (Depending on type of the loan)
    Loans above Rs.2 Crore (Which will be rated internally under RAM Model)
    • LR-MCLR+2.40%
    • NR-MCLR+2.75%
    • MR-MCLR+3.05%
    • HR-MCLR+3.75%
    Loans above Rs.5 Crore (Based on External rating)
    • AAA or Equivalent - MCLR + 1.40%
    • AA or Equivalent - MCLR + 1.50%
    • A or Equivalent - MCLR + 1.85%
    • BBB - MCLR + 2.80%
    • BB - MCLR + 3.35%
    • B - MCLR + 3.50%
    • C&D - MCLR + 4.50%

    IDBI Bank Agri Loans

    For Term Loans up to Rs.25 lakhs (To small and marginal farmers) -
    • Minimum rate of interest - BBR+0.50%
    • Average rate of interest - BBR+0.50%.
    For Working Capital and Short Term Loans above Rs.25 lakh up to Rs.3 crore (To small and marginal farmers) -
    • Minimum- BBR+0.50%
    • Maximum-BBR+0.75%
    • Average-BBR+0.63%
    For Term Loans above Rs.25 lakh up to Rs.3 crore (To small and marginal farmers) -
    • Minimum- BBR+1.0%
    • Maximum-BBR+1.25%
    • Average-BBR+1.3%

    Documents Required to Apply for Loan Against Agricultural Land

    • Duly-filled application form
    • One valid identity proof like your PAN Card, Aadhaar Card, or Passport
    • One valid proof of residence like Aadhaar Card, Passport, or Utility Bills
    • Land documents like registration document, taxes paid, and utility bills
    • No due certificate from Co-operative Credit Society (If required)
    • Copy of the land sale agreement
    • Last six months bank statement (If required)
    • Passport size photograph of the applicant and co-applicant

    Fees and Charges for Loan Against Agricultural Land

    There are many fees and charges that will be charged on your Agri Loan. Some of the most popular ones are:

    • A Processing Fee of 0.50% of the loan amount or Rs.3,000 whichever is higher is usually charged. However, this charge differs from one bank to another. During the festive season, many banks waive the processing fees to encourage borrowers to take loans.
    • Prepayment Charges
    • Conversion Fees
    • Cheque Dishonor Charges
    • Property Insurance Charges
    • Incidental Charges
    • Statutory and Regulatory Charges
    • Foreclosure Charges
    • Late Payment Penalty
    • Stamp Duty
    • Legal Fees
    • Valuation of the Property Fees
    • Inspection Charges

    If you are planning to pledge your agricultural land for money, compare various loans before you choose one. Talk to the bank directly for accurate information. 

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    Home Loan Reviews

    • DHFL Home Loan
      "Not satifactory service"
      0.5 1.0/5 "Really Bad"
      I got home loan with DHFL FINANCIAL INSTITUTION . I am not happy with the services even the customer service response is not so good . The loan amount which they gave was good but they charge very high rate of interest . Overall it is fine experience .
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      , mumbai
      Reviewed on Apr 22, 2019
    • LIC Housing Home Loan
      "Should be transparent and prompt"
      0.5 1.0/5 "Really Bad"
      I have housing loan from LIC, the interest is high. My property located in lucknow but I am staying in mumbai hence for the balance transfer its very difficult they need lots of loan documents. Without proper notification they increased the interest but for the reduction they have lots of procedure and I need to pay Rs.1000.
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      , mumbai
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    • LIC Housing Home Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      LIC HOUSING FINANCE has also offered me a home loan. The process was quick and I got the loan on time. The rate of interest is and there were processing charges as well both are very nominal compare to others in the market . The tenure period is 10 year and it is sufficient .
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      , vadodara
      Reviewed on Apr 21, 2019
    • review Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I have SHAMRAO BANK i have took home loan from this bank . Their service is better, Overall the whole loan process was easy and hassle free. Only the rate of interest were high with this bank. The processing fee is nominal with this bank . And the loan amount is not satisfactory .
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      , pune
      Reviewed on Apr 21, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      HDFC LIMITED is the bank where i have taken the housing loan the loan amount they have offered was good and satisfactory added on that the documentation process was simple and pretty simple documents. I got the loan within one day, the rate of interest was nominal.
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    • DHFL Home Loan
      "Very good service"
      0.5 4.0/5 "Great!"
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      , faridabad
      Reviewed on Apr 20, 2019
    • HDFC Limited Home Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      My housing loan process was simple with HDFC Ltd, they took only 3 working days to verify and sanction the amount, they didn't ask any guarantor for my loan, but I feel the interest is bit higher, I took the amount of Rs. 5 lakhs for the duration of five years.
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      , hyderabad
      Reviewed on Apr 20, 2019
    • ICICI Bank Home Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I have applied or the housing loan with the ICICI BANK the documentation process was simple and easy to get the loan they have given the 95% of value as a loan amount. The duration for repaying the loan is for 20 years and using from last 2 years. The rate of interest was 8.6% which was nominal.
      Was this review helpful? 2
      , pune
      Reviewed on Apr 19, 2019
    • LIC Housing Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
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      Was this review helpful? 2
      , hyderabad
      Reviewed on Apr 19, 2019
    • Bajaj Finserv Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
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      Was this review helpful? 2
      , hyderabad
      Reviewed on Apr 19, 2019
    • Indiabulls Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
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      Was this review helpful? 2
      , new delhi
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      Last 4month back I took one home loan from HDFC Limited , but I am not satisfied with their rate of interest since it is little high , and loan amount is 30L I am satisfied with loan amount and and EMI amount is 25K and tenure is 25years , but their customer service is not much good ,and response not at a time.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Best service"
      0.5 4.5/5 "Excellent!"
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      Was this review helpful? 1
      , bangalore
      Reviewed on Apr 19, 2019
    • IIFL Home Loan
      "NOT SATISFIED"
      0.5 1.0/5 "Really Bad"
      I have previously used the housing loan with the INDIA INFOLINE HOUSING FINANCE LTD and transferred to another bank because the rate of interest was higher. They have offered the pre approved so taken. There are hidden charges applicable also it is floating rate of interest with this bank which was 32% which am not happy.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "GOOD"
      0.5 4.0/5 "Great!"
      The documentation process was easy and simple with the HDFC LIMITED and housing loan was taken before few days. The rate of interest was lesser so transfered the loan with this bank. The duration is for 30 years to repay the loan. There is a pre closure option with this loan.
      Was this review helpful? 2
      , mumbai
      Reviewed on Apr 19, 2019
    • HDFC Limited Home Loan
      "Very good"
      0.5 4.0/5 "Great!"
      I am satisfied with loan amount of 8L with the rate of interest is 8.65% , EMI amount is 6769 rupees and tenure is 20years. It was taken last two years back from HDFC LIMITED and their overall service is good but I would like close this loan after 3 to 4 months.
      Was this review helpful? 2
      , new delhi
      Reviewed on Apr 17, 2019
    • Bank Bazaar Home Loan
      "balance transfer"
      0.5 4.0/5 "Great!"
      i like your offer...t is the first time experience with the Bankbazaar.com and i have a good experience with this channel. I prefer using it through the mobile application as the application is simple and user friendly to access. The customer service is good.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 17, 2019
    • Axis Bank Home Loan
      "Process is good"
      0.5 5.0/5 "Blown Away!"
      My home loan is with Axis Bank and the process to get the loan is good. The disbursement happened on time and the customer support and response is good. The documentation was also a smooth process. The rate of interest and processing charges is normal.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 17, 2019
    • IDBI Home Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I took housing loan with IDBI bank for an while, the loan amount which they have given me was good, it was sufficient based on my requirement, the rate of interest and their processing fee which they have charged me was nominal, AS it is government bank their service is not that up to the mark, but the interest rate was less so i applied.
      Was this review helpful? 1
      , mumbai
      Reviewed on Apr 17, 2019
    • LIC Housing Home Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      LIC housing is good but interest is the concern, I took the amount Rs. 20 lakhs for 20 years. They quoted 10.8% its a floating one, they didn't revise the interest as per the RBI guideline. But they do have balance transfer, part payment and other options.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 17, 2019
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