Agriculture Loan Interest Rate

**Note: This was the interest rate charged by the lender up to 18 February 2026. Please contact the bank for the updated rate of interest.

What is the Agricultural Loan?

Agricultural loan schemes are specialised credit programmes offered by banks and financial institutions to support farmers across India. Key schemes under agriculture loans offered by various financial institutions in India are such as Kisan Credit Card (KCC), PMFBY (Pradhan Mantri Fasal Bima Yojana), NABARD (National Bank for Agriculture and Rural Development) initiatives, and PMKSY (Pradhan Mantri Krishi Sinchayee Yojana). These provide short- and long-term funding for cultivation and allied activities, such as dairy, fisheries, and poultry. These schemes ensure timely, affordable credit and, in some cases, crop insurance protection, helping farmers improve productivity and manage risks effectively. 

Features of Agriculture Loan 

Agriculture loans are designed to support farmers with flexible financing options tailored to diverse farming needs. Below are the key features: 

1. Multiple Loan Variants: based on purpose and repayment tenure, these loans are available in different forms. 

1. Flexibility in usage: Can be used for purchasing farmland, cattle, machinery, or managing day-to-day farm operations and allied activities. 

1. Minimal Documentation: Usually requires simple paperwork for faster processing. 

1. Collateral Flexibility: Offered as both secured and unsecured loans, depending on the loan amount and applicant profile. 

Types of Agriculture Loan 

Agriculture loans are broadly categorised based on tenure and end use to meet different farming requirements. The types of agriculture loans are listed below: 

Crop Loans (Kisan Credit Card) 

1. Short-term loans. 

1. Used for seasonal cultivation expenses. 

1. Used to buy seeds, fertilisers, pesticides, and other farm inputs. 

1. Repayment done typically after harvesting. 

1. Offered at subsidised interest rates under government schemes. 

1. Simplified application with minimal documentation. 

1. Agriculture Gold Loan is a type of crop loan secured against gold ornaments or coins. 

Farm Mechanisation Loans 

1. Finance for tractors, harvesters, irrigation systems, and other machinery. 

1. Helps improve efficiency and farm productivity. 

1. Offers longer tenure due to higher investment costs. 

1. May require collateral or co-applicant. 

1. Repayment aligned with machinery lifespan. 

Land Purchase Loans 

1. Helps farmers buy agricultural land or expand cultivation. 

1. Funds can be used for farmland, orchards, or allied activities. 

1. Long-term loans with tenure of up to 15 years. 

1. Land purchased usually acts as collateral. 

1. Approval is offered based on land value, income potential, and credit profile. 

Livestock Loans 

1. Designed for dairy, poultry, and animal husbandry activities. 

1. Covers purchase of animals, sheds, feed, and equipment. 

1. Repayment is structured around the income generation cycle. 

1. Collaterals may be required for larger loan amounts. 

Warehouse Receipt Loans 

1. Credit against stored agricultural produce in approved warehouses. 

1. Warehouse receipt acts as collateral. 

1. Helps farmers avoid distress selling at low prices. 

1. Loan term is typically up to 12 months. 

Solar Pump Set Loans 

1. Finance for solar-powered irrigation systems. 

1. Usually offered with tenure up to 10 years. 

1. Repayment linked to increased income from improved irrigation. 

Important: Depending on the lender, the loan eligibility, margins, collateral requirements, tenure, and interest rates may vary. Always check with the respective bank or NBFC before applying. 

Eligibility Criteria 

To apply for an agricultural loan, applicants generally must meet the following conditions: 

1. The age of the applicants must be between 18 and 65 years. 

1. Must have access to cultivable land. 

1. Must be an Indian citizen with no criminal record. 

1. No history of loan default. 

Documents Required 

Most lenders require the following documents: 

1. Two passport-sized photographs 

1. Duly filled loan application form 

1. Kisan Credit Card (if applicable) 

1. Identity Proof: Aadhaar Card, PAN Card, Voter ID, Ration Card, etc. 

1. Address Proof: Utility bills, Aadhaar Card, Voter ID, etc. 

1. Income Proof: Bank statements, Income Tax Returns (ITR), etc. 

Note: The documents required may vary from one bank to another, so it is recommended that individuals must reach out to the bank for more details. 

Major Providers of Agricultural Loans in India 

Several banks and financial institutions offer agricultural financing products. Some leading providers include: 

1. State Bank of India (SBI): 

1. Crop Loan 

1. Kisan Credit Card 

1. Drip Irrigation Loan 

1. Combine Harvester Loan 

1. Tractor Loan 

1. Composite Minor Irrigation 

1. Financing Pumpset 

1. ICICI Bank: 

1. Farmer Finance / Krishi Loan 

1. Central Bank of India: 

1. Cent Kisan Tatkal Scheme 

1. Cent Agri Gold Loan Scheme 

1. Cent Agri Infra Scheme 

1. Cent Animal Husbandry Infra Scheme 

1. Cent Kisan Sathi 

Note: For more information about the different agriculture loan types offered by Central Bank of India visit the official website of the bank. 

1. Union Bank of India: 

1. Union Krishi Kamdhenu Gold Loan Scheme for Agriculture 

1. Kisan Credit Card (Animal Husbandry & Fishery) 

1. Finance to Drip Irrigation 

1. Union Kisan Pushpak 

1. PM Kusum Scheme (Pradhan Mantri Kisan Urja Suraksha) 

1. Kisan Credit Card 

1. Axis Bank: 

1. Kisan Power 

1. Kisan Samarth 2.0 

1. Kisan Tatkal 

1. Kisan Matsya 

1. Poultry Power 

1. PM KUSUM 

1. Farm Development Term Loan 

1. Kisan Mitra 

Benefits of Agricultural Loan 

Agricultural loans provide financial assistance that empowers farmers to grow and expand their operations. 

1. Requires minimal documentation 

1. Competitive interest rates (starting as low as 7.00% p.a. under certain government-backed schemes) 

1. Flexible repayment tenures 

1. Based on eligibility, it offers the option for unsecured loans. 

1. Can be used for both short-term seasonal needs and long-term agricultural investments. 

Fees and Charges for Agriculture Loan

Most lenders levy additional charges along with interest on the loan. Here is a simplified breakdown: 

Note: Not all lenders levy all the charges; hence, it is recommended to check the bank’s terms before applying. 

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