Agriculture Loan Interest Rate as Comparison to Banks

Agriculture Loan Interest Rate

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Interest rate is the amount of interest charged over and above the principal amount by the lender from the borrower. Interest rate is the percentage or principal of the loan amount. Business loan interest rate is the amount levied by the lender over the principal amount taken for business purpose.

Agriculture Loan

Agriculture Loan Interest Rate as per Comparison to Banks

Agriculture loans are availed by the farmers to fund their agricultural related activities like animal farming, land cultivation, or purchase of land or agricultural tools etc. In this article we will have a close look on Agriculture Loan and the interest rates of agriculture loan as offered by the banks.

What is Agriculture Loans?

Agriculture loans is a loans offered to farmers to help them meet their various agricultural related expenses. Agriculture loans are offered to farmers, joint cultivators, sharecroppers, tenant farmers, and other persons engaged in agriculture.

Also Read: Federal Bank Business Loan

Features and Benefits of Agriculture Loans

  • Easy and simple application process
  • Minimal documentation
  • Attractive interest rate
  • Quick processing
  • Flexible loan repayment tenure
  • No hidden charges

Why to take an Agricultural Loan?

Agricultural loans is offered for the benefits of the customers who are engaged in agriculture. Various purposes of availing agricultural loan are as mentioned below –

  • Purchase of land
  • Cultivation of crops
  • Establishment of dairy units
  • Establishment of small poultry units
  • For working capital needs
  • For fish farming
  • Horticulture projects etc.

Types of Agriculture Loan

There are various types of Agriculture Loans. Some of them are listed below –

Crop Loan – Crop loan allows farmers to meet their short term expenses arising due to cultivation of crops, maintenance of farm equipment, and other post farm activities. In this loan farmer gets the credit card called the Kisan Credit Card which they can use to withdraw money to make necessary purchases to meet their farming needs.

Agriculture Term Loan – These are long term loan schemes which farmers can avail to buy or upgrade their equipment’s such as windmills, solar power etc.

Loan for Allied Agriculture Activities – This loan can be availed by the farmers who are involved in allied agriculture activities.

Agriculture Gold Loan – The applicants can avail this type of loan by pledging their gold ornaments as a security. The availed loan amount can be used for various farming expenses such as buying machineries or for cultivation of crops etc.

Horticulture Loan – Horticulture Loan is for the farmers who are involved in setting up vegetable farms and orchards. Horticulture loan also helps the farmers to meet the expenses related to other horticulture activities such as cleaning wild trees, setting up of fences and many more.

1. SBI Agriculture Loan Interest Rate

SBI Yono

Apply agriculture loan from SBI and get loan amount up to Rs 20 lakhs. SBI has been a pioneer and a market leader in agriculture-financing in India. SBI caters to the agriculturists and farmers needs and has vast network of 10,505 urban and rural branches[1].

Interest Rate7% onwards
Loan AmountUp to Rs 20 lakhs
Loan TenureUp to 6 years
Processing FeeUp to 1.25% of the loan amount
Pre-closure ChargesNIL
Part-payment ChargesNIL

Types of Agriculture loan schemes offered by SBI

  • Crop Loan
  • Kisan Credit Card
  • Multipurpose Gold Loan
  • Tractor Loan
  • Dairy Loan
  • Poultry Loan
  • Fisheries Loan
  • SBI Krishak Uthan Yojana

2. ICICI Bank Agriculture Loan/ Krishi Loan


ICICI Bank offers a wide range of agriculture loans to farmers. ICICI Bank also offers term loans for buying cattle, purchase of equipment for irrigation and other agriculture requirements. Avail Krishi loan from ICICI and get every solution for your day to day agriculture needs[1].

ICICI Agriculture Loan Interest Rate

ProductInterest Rate
Retail Agri Loan (Kisan Credit Card)9.6% p.a. onwards
Agri Term Loan10.35% p.a. onwards
Tractor Loan23.75% p.a. onwards

Loan Amount, Tenure, and Other Charges

Loan AmountUp to Rs 10 lakh
Loan TenureUp to 12 months
Processing FeeUp to 2% of the loan amount
Penal Interest2% per month on overdue amount
Foreclosure Charge4% on sanctioned limit for account closed within one year of account opening
Bounce ChargeRs 500 per bounce

3. IndusInd Bank Agriculture Loan Interest Rate

IndusInd Bank

IndusInd Bank Indus Kisan Loan is a agri-funding product for progressive Indian farmers. Indus Kisan enables the farmers who are involved in agricultural and allied activities to meet their agriculture requirements. IndusInd Bank provides convenient and hassle-free banking experience. IndusInd bank offers crop loan to meet the requirement for agri and agri-allied activities[1].

Interest Rate10% p.a. onwards
Loan AmountUp to 10 lakhs
Loan TenureUp to 5 years
Processing Fee                                     1.25% of the loan amount + GST
Penal Interest18% p.a. on overdue amount payable along with interest
CERSAI ChargesINR 100 + Applicable GST per non-agri property for charge registration
Prepayment ChargesNIL

4. HDFC Bank Agriculture Loan


HDFC Bank offers a wide range of agricultural loans to meet various financial needs related to agriculture including, farming, horticulture, dairy farming, transportation and warehousing of agricultural products etc.,[1]

Types of Agricultural loans offered by HDFC Bank are

  • HDFC Kisan Credit Card
  • Small Agri Business Loan
  • Pledge Loan – Warehousing Receipt
  • Kishan Shakti Loan
  • Tractor Loan
  • Horticulture Loan
  • Allied Activities Loan etc.

Features of HDFC Bank Agriculture Loan

  • HDFC Bank rates and charges are very attractive
  • Tenure up to 12 months
  • Convenient facilities such as Net banking, Mobile Banking are available
  • Quick loan disbursal
  • Transparency
  • No hidden charges

Charges and Fees

Processing Fees1% + GST
Renewal Fees0.50% of the limit amount renewed + applicable taxes
Additional Interest18% p.a.



National Bank for Agriculture and Rural Development is a financial institution that was set up by the Indian government to promote sustainable agriculture and rural development in the country. NABARD tends to help the peoples engaged in agriculture. The functions of NABARD include the propagation of technologies innovations, financial and non-financial solutions, and institutional development. The initiatives of NABARD is to empower the rural India.

Interest Rate Charged by NABARD for Refinance to banks under different schemes

ParticularsInterest Rate
Short Term Refinance Assistance 
State Cooperative Banks for Financing Crop Loans4.50%
RRBs for Financing Crop Loans4.50%
Commercial Banks/RRBs in respect of their finance to PACs towards crop loans4.50%
DCCBs directly financing for crop loans4.50%
ST – Additional SAO (STCBs and RRBs)7.75
St (Other) (STCBs and RRBs)8.00
ST (SAO) – SCARDBs 9Annual Product)7.90
STCBs/RRBs – Conversion of Short Term – Crop loans into Medium Term loans (3% less than the interest rate charged by banks to ultimate beneficiaries subject to minimum interest rate at 8.10%)8.10
Long Term Refinance Assistance
LT loan to State Govt. for contribution to share capital coop. credit institutions5.80
LT loan to State Govt. for contribution to share capital of RRBs6.00
Direct LendingBank Rate
Warehouse Infrastructure Fund (WIF)
State governments1.0%
State government corporation1.50%
Entities promoted by central/state government owned/assistedPLR + risk premium
Other entitiesPLR + risk premium
Current Bank Rate4.25%
Current PLR7.75%
Food Processing FundBank Rate
State government1.50%
Entities promoted by state governments (without government guarantee)PLR + Risk Premium
Entities promoted by state governments (with government guarantee)1.50%
Other EntitiesPLR + Risk Premium
Current Bank Rate4.25%
Current PLR5.80%

Agriculture Loan Scheme offered by NABARD are –

  • Capital Investment Subsidy Scheme for commercial Production Units for organic/biological inputs
  • Agriclinic and Agribusiness Centres Scheme
  • National Livestock Mission

6. Axis Bank Agriculture & Rural Loans

Axis Bank

Agri & Rural Loans offered by The Axis Bank aims to provide various agriculture facilities for the needs of farmers.

Interest Rate10.49% onwards
Loan AmountFrom Rs 25,001 to Rs 20 lakh For Overdraft: From Rs 2 lakh to Rs 25 lakh
Loan TenureUp to 12 months
Processing FeeUp to 0.75% of loan amount

Various Agri & Rural Loans offered by Axis Bank are –

  • Farmer Funding
  • Loans for Agri Traders & Processors
  • Warehouse Receipt Loans
  • MSME Samriddhi Loans
  • Tractor Loans
  • Gold Loans
  • Micro Finance
  • Surrogate Products for Riral Enterprise
  • Kisan Power Loans etc.

7. IDBI Bank Kisan All Purpose Term Loan


IDBI Bank provides Agriculture loan to farmers for their agricultural needs. IDBI offers hassle-free single term loan limit to farmers for all investment loan requirement like Farm Mechanization, Land Development, Minor Irrigation, Water Conservation, Horticulture and other agri related activities.

Interest Rate7% p.a. onwards
Loan AmountMinimum – Rs 50,000 Maximum – Rs 20 lakh
TenureUp to 9 years
Processing FeeAt the discretion of the bank

8. Kotak Mahindra Bank (Crop Loan)

Kotak Mahindra Bank

Kotak Mahindra Bank provides crop loan that caters to the working capital needs of farmers for meeting cost of cultivation, purchase of inputs, development of farm etc. With Kotak Mahindra enjoy quick and easy loan sanctions. Apply agriculture loan from Kotak Mahindra with competitive interest rates and get high value  loans for high value crops. You can also choose your loan repayment tenure based on your financial situation and needs. Kisan Credit card as well as Medium Term Loan extended to borrowers for ancillary activities such as land development, repair and maintenance of farm assets, drip irrigation etc.

Interest RateMin – Prevailing MCLR or Reference rate Max – 24%
Loan AmountAs per your eligibility
Loan TenureBased on your financial situation and needs
Processing FeeUp to 2% of sanctioned limit
Documentation ChargesRs 5000
Additional Interest3.00% p.a.
Foreclosure Charges3.00% of sanctioned limit

9. Central Bank of India Agriculture Loan

Central Bank of India

Central Bank of India offers various types of Agriculture loan schemes such as –

  • Central Kisan Credit Card
  • Central Agri Gold Loan Scheme
  • Central AGRI INFRA Scheme
  • Cent Flexi Agri Business Loan
  • Central Kisan Vahan Scheme
  • Central Dairy Scheme
  • Central Poly House Green House Shade Net etc.

Interest Rate – Up to 13.25% p.a.

Eligibility Criteria to borrow an Agriculture Loan

  • The applicants age should lie between 18 to 70 years
  • Individual who are engaged in agriculture
  • The individuals will have to own necessary assets, which will need to be hypothecated to the bank once the loan is borrowed etc.

Documents Required for Agriculture Loan

  • KYC documents
  • Land/asset documents
  • Security Post Dated Cheque
  • Any other document mandated by the lender


1. What is agriculture loan?

Ans: Agriculture loans is a loans offered to farmers to help them meet their various agricultural related expenses. Agriculture loans are offered to farmers, joint cultivators, sharecroppers, tenant farmers, and other persons engaged in agriculture.

2. Can I take an agricultural loan to buy farm machinery?

Ans: Yes, you can avail an agricultural loan to purchase your farm machinery.

3. What are the various documents required for agricultural loan?

Ans: Following documents are required for an agricultural loan:

  • Id proof
  • Address proof
  • Income proof
  • Security PDC

4 How to get an agricultural loan at a low rate of interest?

Ans: To get an agricultural loan at a low rate of interest you will have to –

  • Maintain a high credit score
  • Avoid multiple applications at the same time
  • Fixed obligations to income ratio
  • Good relationship with the bank/lender

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