As boldly said by RBI, “As per the 2011 Census, around 55% of the workforce in India is composed of the agricultural and allied sector”. This fell to a percentage of 44% in 2018. This has forced the government to take action in order to motivate farmers. And henceforth provide tractor loan in India in order to maintain sustainability in the food industry.
Such sustainability couldn’t be achieved if it weren’t for GOL and RBI’s credit policy. Taking this factor into consideration, an institution was laid in the 1960s (the first of its kind in independent India) named as All India Rural Credit Committee (AIRCC). Moreover, as per reports, tractor and farming loans constituted nearly 16% of the total credit facility in India in the fiscal year 2017-2018.
Making the credit an easy-to-access facility in India, the Indian Government is giving farmers the much-wanted support. Let us make your journey easier by explaining the details of the tractor loan to you.
How to Avail of a Tractor Loan?
To avail of a tractor loan in India, you need to go through some simple steps as mentioned below:
- Firstly, you need to pass through the eligibility criteria.
- Secondly, you need to keep relevant documents ready in order to start the application process.
- Thirdly, you will need to approach banks/financing institutions.
- Fourthly and finally, you will have to choose between interest rates and EMIs offered by the bank for repayments.
And thus, you’re good to go. But, are these steps that easy in real terms, i.e. at ground zero? Let’s find out.
Tractor loan fact: Talk with experts to know what suits your requirements. Apply for Tractor loans in India and get assistance now!
What are Eligibility Criteria for Availing a Tractor Loan?
To avail tractor loan, you will need to go through a credit score check. Moreover, a credit score represents how good you are at your repayments (in the past). Let us now discuss the good and bad credit scores and how they affect your eligibility criteria for availing a tractor loan.
On a scale of zero to 900, a good, bad and average credit score is:
- Anything between 750-900 is considered a good and reliable credit score.
- Any credit score between 550-750 is considered average and ‘somewhat’ reliable.
- While credit scores below 550 are considered bad and NOT reliable.
This reliability can be checked instantly if you have a history of loans.
There are several tractor loan subsidies to go for, in case you fall under the reliable credit score category.
Did you try our tractor loan emi calculator? This tool will save you from hassles of calculating your monthly EMIs.
What are Documents Required to Avail Tractor Loan for Farmers?
The primary documents required to avail tractor loan in India are given below:
- Aadhar Card (i.e. Address proof)
- Age certificate (i.e. loans are only offered to candidates who have 18+ of age).
- Pan Card (i.e. Photo proof)
- And the documents supporting the ownership of the mortgage.
Besides these documents, you may need a copy of the ITR (Income tax return) fillings.
Which Indian Banks Offer Tractor Loan?
There are many banks offering tractor loans. The tractor loan interest rates vary with respect to the banks providing them as well. However, we have shortlisted some of our banking partners that support tractor loan. Also, efficiently managing hassle-free service to the farmers through our portal. We have attached quick links to go through our partner banks and their farmer-supporting schemes.
1. HDFC Bank Tractor Loan
HDFC bank offers a comprehensive amount of 90 % of the price of the tractor as a loan to the farmers. In addition, some of the noticeable features of the loan offered by HDFC bank are:
- A minimal processing fee of 2 %.
- Prepayment fee of 4 % if before 12 months from the date of disbursement,
- And a prepayment fee of 2% after the date of disbursement.
Eligibility for Availing HDFC Tractor Loan
Both farmers and non-farmers need to fulfill following eligibility criteria to avail the tractor loan from HDFC bank:
Eligibility for Farmers
- The age of the applicant should be between 18 to 60 years.
- The applicant must have an average annual income of INR 1 Lakh.
- Farmers must hold at least 3 acres of land.
Eligibility for non-farmers
The eligibility for non-farmers will be the same. However, they don’t need 3 acres of farming land. And additionally, they should have a telephone (Owned / PP landline or mobile) as it’s compulsory.
2. SBI Bank Tractor Loan
SBI bank offers a tractor loan if your land holdings are of 2 acres (minimum). Also, some of the noticeable features of an SBI loan are:
- The mortgage value here is 100% of the price value of the tractor.
- A minimal upfront fee of 0.5% is charged.
- The tractor and accessories financed from the bank need to be insured through some insurance plan.
Eligibility for SBI Tractor Loan
- Any individual, JLGs/SHGs groups, institution or organization can finance tractor with SBI tractor loan.
- Applicants must have sufficient inflow of regular income either from their own farm activity. Or applicants can have custom hiring incomes for the tractor proposed to be purchased along with its accessories.
- The borrower or applicant must possess a land holding of at least 2 acres.
3. Axis Bank Tractor Loan
Axis bank offers tractor loans under the following conditions:
- Minimum age of 21 years is required for the application.
- The maximum age of the applicant should be 75 years from the date of disbursement.
- A minimum land property of 3 Acres to start the proceedings.
To avail Axis bank tractor loan, you would be required to fulfill following eligibility criterias:
- Minimum age of tractor loan applicant should be 21 years.
- Maximum age should be up to 75 years during the date of fund allocation.
- Farmers must own a minimum 3 acres of land.
4. ICICI Bank Tractor Loan
ICICI bank offers loans to buy tractors under the following conditions:
- The loan applicant should have 3 acres of land in his name.
- ICICI bank offers non-mortgage loans as well.
- Minimal paperwork and processing time.
5. Kotak Mahindra Bank Tractor Loan
Some of the perks offered by Kotak Mahindra bank are:
- It offers mortgage and non-mortgage loans
- Free life insurance shied (Kotak Kisan Suraksha)
- It is a quick and hassle-free service at your doorstep.
6. Mahindra Tractor Finance
Here are some points to ponder while availing of a tractor through Mahindra finance:
- Quick and hassle-free disbursement of loans.
- Mortgage or non-mortgage facility available.
Apart from these loans, you can get a Bank of Baroda Tractor loan as well.
Attention: Please note that every loan provided by lending institutions is subject to terms and conditions. Please read all documents carefully.
What Are The Popular Repayment Options Offered By The Banks?
Having discussed popular perks by different banks, let us now discuss some of the popular repayment options available by the above-mentioned banks as follows.
- Talking about HDFC bank, it offers a loan repayment term of 12 to 84 months.
- While SBI bank offers an interest rate of 12% and a repayment term of 5 years, excluding a grace period of one month.
- In the meanwhile, Axis bank got variable interest rates depending on the farmer’s income. Also, the repayment term can be up to 7 years.
- Talking about ICICI bank, the repayment term can be up to five years.
- Mahindra Finance offers both old tractor loans and new tractor loans. Further information can be gained by calling its toll-free number 18002095600.
What is a Kisan Credit Card?
Kisan credit card is a credit facility made available to the public by NABARD (National Bank for Agricultural and Rural Development). Moreover, it was launched in 1998 and offers short-term tractor or agricultural loans. Kisan credit card is now connected with the Pradhan Mantri Kisan Samman Nidhi Yojna. Hence, farmers can give their loans based on the cultivation of their land.
Some features of Kisan Credit Card are:
- This credit card is meant for meeting agriculture and other allied activities.
- This credit card’s limit is up to INR 3 lacs.
- It covers an accidental insurance cover of INR 50,000.
- It offers no collateral tractor loan up to INR 1.60 lacs.
Conclusion
In the blog, we discussed tractor loans and data and facts associated with them. Also, we read about Kisan Credit Cards. This gives you an illustration of how a tractor loan can be availed in the Indian market without hassle. If you have any doubts, you can use the easy to use EMI calculator for tractor loans on our website to get instant estimates.
Frequently Asked Questions of Tractor Loan
Que. What kind of tractor loan should you get?
Ans. There are several kinds of tractor loans available, ranging from new tractor loans to old tractor loans. Different banks also provide different kinds of loans.
Que. How to apply for a tractor loan in India?
Ans. Any farmer who fulfills the conditions given in this blog can apply for a tractor loan successfully and get their tractor loan financed.
Que. Can I get a loan for a tractor?
Ans. Yes, you can get a loan for a tractor if you fulfill the eligibility criteria and have documents required by the lending institution.
Que. What kind of loan for a tractor is suitable?
Ans. You can avail tractor loans offered by Axis, HDFC, Mahindra, Kotak and more lending institutions.
Que. How to apply for tractor loan in india?
Ans. To apply for a tractor loan check the eligibility criteria, required documents and choose a preferred bank/lending institution.
Que. What is the maximum loan limit for financing a tractor?
Ans. Most lending institutions provide funds up to 90% of the cost of the tractor..The rest of the 10% is acquired from the buyers.
Que. What is the age limit for tractor loan?
Ans. Anybody between the age of 18 to 60 years can avail tractor loan. Furthermore, you should have a minimum annual income of INR 1 Lakh. However, the loan amount can vary for every lending institution.
Que. Which tractor loan banks provide the lowest new tractor loan?
Ans. State Bank of India offers tractor loans online with interest rates starting from 9%.
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