{"id":1801,"date":"2023-03-09T01:20:58","date_gmt":"2023-03-09T00:20:58","guid":{"rendered":"https:\/\/www.agriculturelore.com\/?p=1801"},"modified":"2023-03-09T01:20:58","modified_gmt":"2023-03-09T00:20:58","slug":"what-is-agriculture-loan","status":"publish","type":"post","link":"https:\/\/www.agriculturelore.com\/what-is-agriculture-loan\/","title":{"rendered":"What is agriculture loan?"},"content":{"rendered":"

Agriculture loans are a type of lending specifically for farmers and agricultural businesses. While the specific terms of these loans can vary, they typically offer lower interest rates and longer repayment terms than other types of business loans. This makes them an attractive option for farmers who are looking to finance their operations.<\/p>\n

An agricultural loan is a type of loan specifically designed to finance the purchase of land or other agricultural purposes.<\/p>\n

What are the benefits of an agriculture loan? <\/h2>\n

The USDA’s Farm Service Agency (FSA) offers Farm Ownership Loans and Microloans to help farmers and ranchers with the costs of purchasing or improving their farm or ranch. These loans can be used to pay for closing costs, construct or improve buildings on the farm, or to help conserve and protect soil and water resources. FSA’s Microloans are a type of Operating or Farm Ownership Loan, and are available to eligible borrowers who need smaller amounts of financing than what is available through the Agency’s regular Farm Ownership Loan program.<\/p>\n

First time farmers can have a tough time qualifying for a loan. Like any business, it is hard to get financed when you don’t have a track record of sales. Luckily, we are seeing a number of options that can help you get qualified. Loan financing can be a powerful tool when used properly.<\/p>\n

Who qualifies for FSA loan <\/h3>\n
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To be eligible for this loan, you must:<\/p>\n

– Be a US citizen, non-citizen national or legal resident of the United States or US territories
\n– Be an agricultural producer or family farmer
\n– Have experience in farm business operations in at least three of the 10 years prior to the application submission<\/p>\n

Agriculture loan interest rates differ from bank to bank in India. Some of the best interest rates for agriculture loans are provided by Central Bank of India, IndusInd Bank and HDFC Bank. However, it is important to compare the interest rates and terms and conditions of the loan before availing it.<\/p>\n

What are the disadvantages of agriculture loans? <\/h2>\n

Farm loan waiver is a popular measure used by the government to provide relief to farmers. However, there are several drawbacks to this policy. Firstly, it disrupts credit discipline among farmers. Secondly, farmers may turn into wilful defaulters due to the next loan waiver scheme, which is bad for the economy. Thirdly, the focus of such schemes is on small and marginal farmers, which ignores the dominant role of moneylenders and informal credit sources in the rural economy.<\/p>\n

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Documents Required to Apply for Loan Against Agricultural Land<\/p>\n

1. Duly-filled application form
\n2. One valid identity proof like your PAN card, Aadhaar Card, or Passport
\n3. One valid proof of residence like Aadhaar Card, Passport, or Utility Bills
\n4. Land documents like registration document, taxes paid, and utility bills<\/p>\n

How many acres is considered a farm? <\/h2>\n

If your parcel of land is between 20 and 160 acres, you must apply for agricultural designation. However, if your parcel is less than 20 acres, you may still be able to receive agricultural designation if you apply for it and meet the following criteria: produce and market $1,500 worth of agricultural product on the property.<\/p>\n

If you’re looking to qualify for a farm credit, it’s important to find a lender that operates in your state. Additionally, you’ll need to make sure your credit score meets the lender’s criteria. Some lenders require a minimum credit score of 680, while others may be more lenient. However, it’s important to remember that each lender is different, so be sure to do your research before applying for a loan.<\/p>\n

How much of a down payment do you need for farmland <\/h3>\n
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The Direct Farm Ownership Down Payment Loan requires loan applicants to provide a minimum cash down payment of 5 percent of the purchase price of the farm. This down payment may be made with the applicant’s own funds, or with the help of a family member, friend, or farm organization. The purpose of this loan is to help beginning farmers and ranchers with limited capital access the land and equipment they need to get started in farming or ranching.<\/p>\n

The following documents are required for Bank’s loan application form:<\/p>\n

1. Customer Request Letter for AIF Loan duly filled and signed<\/p>\n

2. Passport size photographs of the promoter\/partners\/director<\/p>\n

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3. Identity proof – Voter ID card\/PAN card\/Aadhaar card\/Driving license<\/p>\n

4. Address Proof : Proof of Registration: