Agriculture is one of the significant contributors to the Indian economy. To empower the sector, banks and co-operative societies offer a wide range of agriculture loans. Here in this guide, we take a look at the interest rates of agriculture loans in India along with the features, benefits, eligibility and more.

What are agriculture loans? 

Agriculture loans are a select type of loans offered to farmers to help them meet various agriculture-related expenses. Compared to other sectors, agricultural activities are time-consuming, labour-intensive and expensive. Agriculture loans are offered at nominal interest rates to help small farmers meet various expenses.

Purchasing of agricultural land, agricultural tools, storing produce, transport of produce, hiring labour are some of the activities for which agriculture loans are availed. As per the Government of India, agriculture is a sector of national importance. Hence, the government takes various initiatives to ensure substantial credit flow to the industry.

Banks and co-operative societies offer short-term and long-term agriculture loans for investment and production purposes. 

Agriculture Loan Interest Rates

As agriculture is a sector of national importance, most commercial banks – public and private – as well as co-operative societies offer agriculture loans at nominal interest rates. Generally, the interest rates for agriculture loans start at 8.80% and upwards. Besides the interest rate, borrowers are charged with a one-time processing fee that ranges from nil up to 4% of the loan amount. 

Here is a list of the interest rates of agriculture loans from some of the top banks in India

Name of the Bank Interest Rate Processing Fee
Andhra Bank (AB Kisan Rakshak) 13.00% onwards As per terms and conditions
Canara Bank (Kisan Suvidha Scheme) 10.10% onwards As per terms and conditions
Central Bank of India (Cent Kisan Tatkal Scheme) 8.70% onwards
  • NIL – for up to Rs. 20,000
  • Rs. 120 per lakh for loans above Rs. 20,000(Subject to a maximum of Rs. 20,000)
Federal Bank (Federal Green Plus Scheme) 11.60% onwards As per terms and conditions
HDFC Bank (Retail Agri Loans) 9.10% - 20.00% 2% to 4% (up to a maximum of Rs. 2,500)
ICICI Bank (Agri Term Loan) 10.00% - 15.33% Up to 2% of the loan sanctioned amount
IndusInd Bank (Crop Loan) 10.15% - 14.75% Up to 1% of the sanctioned amount plus service tax
Karur Vysya Bank (Green Harvester) 10.30% onwards As per terms and conditions
UCO Bank (UCO Kisan Bhoomi Vriddhi) 3.10% - 3.50% Nil for loans up to Rs. Three lakhs
Union Bank of India (Long-term agriculture loans) 8.10% upwards Nil for loans up to Rs. 25,000


*Note that the actual interest rates vary based on the type of agricultural loan scheme you opt for as well as other factors. Get in touch with your bank for the latest rates of interest. 

Other Fees for Agriculture Loans

Besides the interest rates, borrowers also have to pay several additional charges, including:

  • Foreclosure Charges – Applied when the borrower pre-closes the loan by paying the balance amount, before the end of the loan term. Some banks levy foreclosure charges, while others do not.  

  • Processing Fee – It’s a one-time fee that is deducted from the sanctioned loan amount. Note that the processing fee is deducted before the loan amount is disbursed. 

  • Late Payment Penalty – It is levied when the loan EMI is not paid on time, as per the schedule. 

  • Bounce Charges – It is levied when the cheque issued for a loan EMI payment bounces. 

  • Stamp Duty Charges – It is applied based on the prevailing state laws. It’s a one-time fee that is charged at the time of loan disbursal. 

  • Documentation Charges – Applied at the time of loan sanction. 

  • Valuation Charges – It is applied if the bank values the residential/agricultural/commercial property of the borrower. 

*Note that all the charges mentioned above may or may not be levied by your lender. Get in touch with your bank for the detailed list of charges levied. 

Additional Reading: How to get agriculture loans in India?

Where to apply for agricultural loans in India? 

As per the several initiatives by the central and state governments, nearly all major commercial banks and co-operative societies offer agriculture loans to aid farmers. All lenders are required to maintain complete transparency in loan sanction and documentation so that farmers can avail loans easily without undergoing any extra hassles.

Here are some of the popular agriculture loan lenders in India:

  • Agriculture loans from State Bank of India 

As the leading public sector bank in India with an expansive nationwide network covering urban and rural areas, the State Bank of India offers a wide array of agriculture loan schemes like:

  1. Crop loans
  2. Loans against warehouse receipts 
  3. Produce marketing loan scheme 
  4. Agriculture term loans 
  5. Kisan gold card scheme 
  6. Dairy plus scheme
  7. Kisan credit card scheme 
  8. Land development scheme 
  9. Financing for the purchase of combine harvesters, mechanisation and other equipment 
  10. Finance for horticulture, dairy farms and more 
  • Nationalised Banks 

Several leading national banks like UCO Bank, Punjab National Bank, United Bank of India, Syndicate Bank, Allahabad Bank, Oriental Bank of Commerce, Indian Bank, Bank of Baroda and several others offer agriculture loans at low-interest rates for the benefit of farmers.

  • NABARD / Co-operative Agricultural Bank Loans 

National Bank for Agriculture and Rural Development (NABARD), state co-operative societies, Regional Rural Banks (RRBs), rural development banks and other co-operative societies offer term loans for farmers at low-interest rates. Besides term loans, farmers can also avail micro-finance and other loan schemes as well.

Features and Benefits of Agriculture Loans 

The key features of agriculture loans are:

  • Attractive Interest Rates – Compared to other investments, the interest rates for agriculture loans are significantly lower. It reduces the overall cost of the loan, helping farmers reduce their debt burdens and repay the loan quickly.

  • Minimal Documentation – Agriculture loans require minimal documentation, as applicants have to submit only a few KYC documents like – photo proof, ID proof, residence proof, and so on.  

  • Quick Processing – Processing of agriculture loans is done quickly, and the loan amount is disbursed directly to the bank account of the borrower.

  • Flexible Repayment Options – Farmers can opt for long-term or short-term loans depending on their repayment capacity. 

  • No Hidden Charges – Agriculture loans do not incur other hidden charges like foreclosure charges and so on. 


Avail Agriculture Loans at the Best Interest Rates

With several banks and co-operative societies offering agriculture loans, it’s easier for farmers to borrow at affordable interest rates. Make sure to compare the interest rates, eligibility conditions of agriculture loans from different lenders and choose the right option that best fits your needs.

FAQs - Latest Agriculture Loan Interest Rates in India

1. What are various types of agriculture loans?

There are several types of agriculture loans like term loans, crop loans, short term loans, gold loans for agriculture, etc. The loan type for agricultural purposes depends on the guidelines of the bank and the specific products that it caters for.

2. Can agriculture loans be applied by an NRI?

No. Agriculture loans can be applied by resident Indians. Agriculture loans for NRIs can be applied if they are as per the guidelines of the lenders.

3. What are processing charges for agriculture loans?

Processing charges are part of every loan sanctioned by any lender. These charges are levied as a percentage of the loan sanctioned.