🔑 Key Features
| Feature | Details |
|---|---|
| 🧑🌾 Eligible Borrowers | Farmers (individuals, groups, SHGs, FPOs, etc.) |
| 💰 Loan Amount | Typically ranges from ₹50,000 to ₹25 lakh (varies by equipment) |
| 🏦 Loan Tenure | 3 to 7 years |
| 📉 Interest Rate | 7% to 12% per annum (may vary based on bank and subsidy) |
| 🔒 Collateral | Required for high-value loans; may be waived for small loans |
| 📆 Repayment | Monthly, quarterly, or seasonal installments |
| 🎯 Subsidy | NABARD or government subsidies available for some equipment |
✅ Eligibility Criteria
Must be an Indian farmer (individual or group)
Should have land ownership or valid lease rights (for some banks)
Good credit history (if applicable)
For tractor loans, landholding size may be required (usually 2+ acres)
🧾 Purpose of Farm Equipment Loan
To finance the purchase, repair, or leasing of essential agricultural tools and machinery, such as:
Tractors
Harvesters / Combine harvesters
Power tillers
Seed drills
Sprayers
Irrigation pumps
Threshers
Ploughs and cultivators
Solar-powered agricultural tools
Apply Loan
📋 Documents Required
Aadhaar card
PAN card
Land ownership or lease certificate
Bank passbook or statement
Quotation/invoice of equipment to be purchased
Passport-size photo
Proof of income (optional in some cases)
🛡️ Government Subsidies & Support
Subsidies are often available through State Agriculture Departments or NABARD (up to 40–60% in some cases)
Example schemes:
Sub-Mission on Agricultural Mechanization (SMAM)
PM Kisan Tractor Yojana
NABARD Refinance Scheme for Farm Mechanization
💡 Benefits of Farm Equipment Loan
| Benefit | Description |
|---|---|
| 🚜 Boosts Productivity | Enables modern farming and faster crop cycles |
| 💰 Reduces Cost | Lowers manual labor costs over time |
| 🏦 Affordable Financing | Low interest with long repayment tenure |
| 🧾 Tax Benefits | Interest and depreciation may be tax deductible |
| 🎯 Targeted Usage | Loan used strictly for agri-purpose equipment |
🔁 Example
Ramesh, a farmer in Maharashtra, needs a tractor worth ₹6 lakh.
He applies for a Farm Equipment Loan from SBI.
He contributes ₹1 lakh as margin money. The bank sanctions ₹5 lakh for 5 years at 9% interest.
He repays in seasonal EMIs, and also receives 25% subsidy from a government scheme.