Loan Against Agricultural Land

Farmers in India have to bear massive expenses for crop cultivation. It is mostly difficult for them to make profits and they usually struggle to repay their debts. To provide financial aid to farmers in India when required, many banks offer agriculture loans or loan against agriculture land. These loans are offered to farmers against a piece of agricultural land in their name to meet agricultural as well as personal expenses.


What is Loan Against Farm Land?

A loan against agriculture land is a mortgage loan variant offered against a piece of land owned by the borrower/farmer. You can avail of the maximum loan amount equivalent to the price of the mortgaged land. Loan against agricultural land loan can be used by the borrower for a variety of purposes like meeting production and consumption needs, crop cultivation expenses, equipment purchase, and managing personal needs (marriage, medical treatment, education, etc.).

Check Loan Against Property Interest Rate for lowest LAP Interest Rates.

Features of Loan on Agricultural Land

  • Mortgage loan against agricultural land is offered to farmers, planters, horticulturists, dairy owners, orchard owners and other such people who cultivate crops. 
  • Funds can be used for agricultural purposes like buying agricultural equipment, food processing, setting up dairy units/ fisheries/ rice mills/ greenhouse/ cold storage/ horticulture centres, micro-irrigation, buying agriculture insurance to protect from crop losses, and so on.
  • Usually, farmers are not required to submit income tax returns to apply for this loan.
  • These loans require minimum documentation.
  • The loan tenure can go up to 20 years.
  • Mortgage loan against agricultural land interest rates are typically lower than personal loans.
  • No hidden charges are involved for these loans.
  • Considering the farmer’s situation, lenders usually come up with a flexible repayment plan.
  • The turnaround time for loan against agri land is quick and the lenders are sensitive to the harvest season.
  • The borrower can avail of tax benefits on the interest paid.

You can also Check Loan Against Property without Income Proof and ITR

Interest Rate for Loan Against Agricultural Land

Lender’s NameApplicable Rate of InterestProcessing Fee
HDFC loan against agricultural land7% - 18.75% p.a.2%
ICICI Bank9.50% - 14.85% p.a.Up to 2%
Mortgage loan against agricultural land SBI9.35% p.a. onwards1%
Kotak Mahindra Bank9.50% p.a. onwardsUp to 2%
Citibank 8.53% onwards0.75%

Compare Banks to get lowest Mortgage Loan Interest Rate.

Eligibility Criteria for Loan Against Agricultural Land

  • Farmers, planters, horticulturists, dairy owners, orchard owners and other people who cultivate crops are eligible to apply for a loan against property agricultural land.
  • For most lenders, the age criteria is 21 to 65 years of age. However, a few banks offer loans to applicants aged 18 years or above. 
  • If the land to be pledged is owned by two people, having a co-applicant is a must.
  • Under this loan, an agricultural land is pledged as a collateral. The mortgaged land must have clear titles to be eligible to apply for a loan against farm land.
  • Most lenders prefer applicants to have residential stability of at least 2 years.
  • Most lenders offer loans against farmland based on the size of the pledged land. 

You can also check Loan Against Property Eligibility SBI

Documents Required to Apply for Loan Against Agricultural Land

The list of documents required to avail of a loan against agricultural land in most banks is given below:

  • Duly filled and signed application form along with passport size photographs
  • Valid identity proof such as Passport, PAN card, Aadhaar Card, etc. 
  • Valid address proof such as Passport, Aadhaar Card, Utility Bills, etc.
  • Land documents such as registration, taxes paid, utility bills, etc.
  • Copy of the land sale agreement
  • Bank statement of at least the last 6 months
  • No Due Certificate from Co-operative Credit Society 

You can also Check the necessary Documents required for Loan Against Property

Fees and Charges for Loan Against Agricultural Land

Some of the most common charges levied on loans against agricultural land are:

  • Processing fee on the sanctioned loan amount
  • Part prepayment and foreclosure charges
  • Property insurance charges
  • Late payment penalty
  • Conversion fees
  • Cheque dishonour charges
  • Incidental charges
  • Statutory & regulatory charges
  • Stamp duty
  • Legal fees
  • Fee for valuation of the pledged property 
  • Inspection charges

How to Apply for Loan Against Land?

You can apply for an agriculture loan against property either online or offline. 

Steps for Online Process

  • Choose the preferred lender and visit its official website.
  • Choose the ‘Loan Against Agricultural Land’ option, which is often given under the ‘Loans’ tab.
  • Mention the required details carefully and attach the supporting documents. 
  • Submit the entered information and documents.
  • Your request will be processed, and the lender will take further steps to complete the loan process.

Steps for Offline Process

To apply for a loan against an agricultural piece of land, you have to visit the nearest branch of the preferred lender and apply for the loan by submitting the filled-in and signed application form.

FAQs for Loan Against Agricultural Land

What is the PM Kisan Loan?


It is a single credit facility or term loan for farmers to help them meet their all agricultural and ancillary requirements, such as the purchase of fertilizers, seeds, etc. 

What is a loan against agricultural land?


A loan against agricultural land is a type of credit which is offered against the agricultural land owned by the borrower.

Can I get loan against property on agricultural land?


Yes, you can get a loan against property on agricultural land if you meet the required eligibility criteria of the lender.

Which bank is best for loan against agricultural land?


HDFC loan on agricultural land interest rate is one of the lowest currently. Therefore, you must consider getting an agriculture loan from HDFC Bank.

Is a CIBIL score required for an agriculture loan?


Although a good CIBIL score of 750 or above can get you a better loan deal, a CIBIL score is not a mandatory requirement for some lenders for an agriculture loan.

Can banks give loans to buy agricultural land?


Yes, many banks as well as NBFCs offer loans to purchase agricultural land. Generally, these loans are termed a Land Purchase Loan or Agriculture Land Purchase Loan.

Does SBI give loans on agricultural land?


Yes, the bank offers loans on agricultural land. To avail of the loan against agricultural land SBI requires applicants to meet the eligibility criteria.

How much loan can I get on land?


You can get up to 75% of the value of the purchased land.

What is agriculture loan interest rate?


The loan against agricultural land interest rate starts from 7% at present.

Which bank is best for farmer loan?


State Bank of India, ICICI Bank, and HDFC Bank are some of the best banks for farmer loans.

What is the age limit for agriculture loan?


Most lenders require you to be in the age group of 21 to 65 years.

What are the types of agriculture loans available?

  • Crop Loans
  • Land Purchase Loans
  • Warehouse Receipt Loans
  • Farm Mechanization Loans
  • Livestock Loans
  • Solar Pump Set Loan