Tractor loans are loans provided to farmers or businessmen to buy new or pre-owned tractors. Such tractors can be used for agricultural or commercial purposes. A farmer has to own a minimum of three acres of agricultural land to qualify for a tractor loan, though this could vary from lender to lender. 

Lenders in India offer such tractor loans to individuals for purchasing new or pre-owned tractors at competitive interest rates which start at 10.55% p.a. Processing fee of around 0.5% may also be charged over the loan repayment term with repayment tenure which could last up to 7 years.

How to avail Tractor Loans? 

Eligibility Criteria 

Most lenders offer tractor loans to farmers and non-farmers, who have to fulfil the below eligibility criteria to avail a tractor loan, though the criteria could vary from lender to lender. 

For Farmers Criteria to get Tractor Loan

  • Applicant age should be above 18 years of age
  • Maximum age while availing funding should be under 60 years
  • Applicant should own minimum of 3 acres of agricultural land
  • Applicant should earn an annual  minimum income of Rs.1 lakh 

For Non-Farmers Criteria to get Tractor Loan

  • Applicant age should be at least 18 years of age
  • Maximum age while availing funding should be under 60 years
  • Applicant should earn an annual minimum income of  Rs.1,50,000
  • Applicant should have access to a telephone connection in his/her name

Documents Required by lenders for availing Tractors loans

Common documents required by lenders from the borrower for availing tractor loans are as below


  • Duly-filled application form 
  • 2 recent photographs of the applicant
  • Verification of signature  proof  through submission of driving licence, passport, PAN card, or bank’s verification 
  • Residence proof
  • Identity proof
  • Proof of landholding 
  • Constitutional related particulars 
  • Tractor Quotation by Dealer 
  • Land Valuation Report 


  • Duly signed loan documents 
  • Original tractor invoice of dealer 
  • Title Search Report 
  • Deed of the Mortgage deed, if available
  • Receipt of Margin Money 
  • Comprehensive Insurance 
  • Sub-registrar acknowledgement proof

Key Factors to Consider While Applying for a Tractor Loan 

One has to keep certain key essentials in mind before availing of a tractor loan.

  • Interest Rate – One of the foremost essential is the rate of interest charged by the lender for availing a tractor loan. For tractor loans, the interest rate could be low as 10.55% p.a. which could go up to a high of  23.95% p.a. The interest rate is considered by the lender after evaluating various factors like the amount of loan,  loan tenure, etc. Going for a loan with a low interest rate will reduce your monthly financial repayment burden. 

  • Tenure of Loan – The maximum tenure available for tractor loans is 7 years, though some lenders may offer a maximum repayment term of 5 years. Going in for a short repayment term ensures that you have to pay a lower interest over the loan tenure, however, you will need to pay higher EMIs. So, check the maximum loan tenure offered by the lender, your capacity to repay and then choose the tenure.

  • Additional ChargesThere could be other charges like processing fee, prepayment fee, documentation charges, etc., which could increase your loan. Therefore, go for a loan where you are charged a competitive rate of interest, plus consider the additional charges levied.

  • CollateralProviding collateral or not depends on the lender through whom you are taking the loan. So, check the terms before finalising a loan. 

  • Margin - Check the margin quoted by your lender while availing of a tractor loan. Most lenders provide loans of up to  90% of the price of the tractor, which means the borrower would have to make arrangements for the remaining 10% of the funds. In case the lender provides a higher margin, ensure that you have the required funds for making timely payments.

How to Apply for a Tractor Loan? 

Tractor loans can be applied by both online or offline channels. Few lenders provide the applicants to apply online through their official websites while other lenders expect the applicant to visit their nearest branch to avail such a loan. Before zeroing in on any tractor loan, familiarise yourself with the terms and conditions of the loan. Compare tractor loan options available from the lender and against multiple lenders.

For applying Online Tractor Loan

  • Visit the official website of the lender.
  • Click on the product page and select “Apply Now.”
  • Key in your details like e name, address, contact details, state and city that you reside in, etc.
  • Submit the form online.
  • The representative will contact you for further processing of the application.

Offline Mode Tractor Loan

  • Visit the nearest branch of the lender 
  • Submit the  required documents with your details like e name, address, contact details, state and city that you reside in, etc
  • Apply for a loan through the lender’s branch. 
  • Fill up the application form 
  • Submit it with the required documents 

Additional Reading : Top 7 Banks that Offer Easy Loans to Farmers


Tractor loans are now easily available to farmers and businessmen to carry on their farming or commercial activities.

Tractor Loan FAQs

1. Do borrowers need to submit collateral while availing tractor loans?

Most lenders ask applicants to provide collateral or security through hypothecation of assets when borrowing a tractor loan.

2. Can I repay the tractor loan before the end of the loan tenure?

Yes, many lenders give you the option to prepay and pre-close your loan before the end of the loan tenure.

3. What will happen if I default on payment within the due date?

If you default on your loan instalment and don’t repay your loan instalment within the specific time period, then you will be levied a late payment charge. Apart from extra charges, such a default would also impact your chances of getting potential loans getting approved in an easy and hassle-free manner.

4. What is the maximum tenure of a tractor loan?

Most lenders provide tractor loans up to a maximum repayment tenure of 7 years, though some lenders could reduce it to 5 years.

5. Are tractor loans available to only farmers?

Tractor loans are available to farmers and non-farmers.