What Is an Agriculture Loan?
An Agriculture Loan is a financial product designed to support farmers and agribusinesses. It can be used for crop cultivation, purchasing equipment, setting up irrigation systems, buying livestock, or developing farm infrastructure. These loans may be offered by banks, NBFCs, or government schemes with low-interest rates and flexible repayment options.
Key Features of Agriculture Loans
- Low-interest rates for farmers
- Flexible repayment schedules
- Loan types include crop loans, equipment loans, and infrastructure loans
- Government subsidies may be available
- Loans can be secured or unsecured depending on amount and purpose
Interest Rates 2026
| Loan Type |
Interest Rate (p.a.) |
Loan Amount |
Tenure |
| Crop Loan |
4% – 9% |
Up to ₹10 lakh |
6–24 months |
| Tractor / Equipment Loan |
6% – 12% |
Up to ₹25 lakh |
12–60 months |
| Farm Infrastructure Loan |
6% – 12% |
Up to ₹50 lakh |
12–72 months |
| Livestock Loan |
5% – 10% |
Up to ₹15 lakh |
12–36 months |
Eligibility Criteria
- Indian citizen with agricultural land or business
- Farmer, agribusiness owner, or co-operative member
- Valid KYC documents (Aadhaar, PAN)
- Proof of land ownership or lease agreement
- Good repayment history if previous loans exist
Documents Required
- Identity proof (Aadhaar, PAN, Passport)
- Address proof (Utility bills, Voter ID)
- Land ownership / lease documents
- Income proof / crop estimation
- Bank account details for loan disbursal
Agriculture Loan Example
If a farmer takes a ₹5,00,000 crop loan at 7% interest for 12 months:
- Monthly EMI: ₹43,900 approx.
- Total interest payable: ₹26,800 approx.
- Total repayment amount: ₹5,26,800 approx.
Advantages and Disadvantages
Advantages
- Supports agricultural activities and farm growth
- Lower interest rates through government schemes
- Flexible repayment aligned with harvest cycle
- Encourages investment in equipment and infrastructure
Disadvantages
- Eligibility verification may take time
- Secured loans require collateral
- Non-repayment can lead to land/property risk
How to Choose the Best Agriculture Loan in 2026
- Compare interest rates and subsidies offered
- Check repayment tenure aligned with crop cycles
- Verify lender reputation and official schemes
- Borrow only for genuine farming needs
- Read all terms & conditions carefully
Frequently Asked Questions (FAQs)
What types of agriculture loans are available?
Crop loans, tractor/equipment loans, farm infrastructure loans, and livestock loans are commonly available.
Can new farmers avail loans?
Yes, most banks and government schemes provide loans to new farmers with proper KYC and land proof.
Are subsidies available?
Yes, government schemes often provide interest subsidies or reduced rates for small farmers.
Is collateral required?
Secured loans require land or equipment as collateral; small crop loans may be unsecured.
Author: All Finance Store Agriculture Loan Team
Expertise: Farming & Agricultural Financing
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. Agriculture loan terms, interest rates, and eligibility vary by lender and government schemes. Always verify details with official sources before applying.