Agriculture is the main profession of people in rural India but from the past few decades, it has been facing problems in all parts of the country. Climate change, over production, lack of infrastructure, low prices of agri produce are some of the factors that have caused distress to farmers and it is these reasons that have made the government take note of their plight. The government has announced many pro-farmer policies and also waived off loans to bring them out of the crisis. Speaking of loans, the agriculture loan interest rates have been reduced and today, farm loan interest rates are the lowest in the market. So, here is checking out the different aspects of interest rates to know it better.
As per the directives of the Indian government, crop loans up to Rs. 3 lakh are offered at interest rate of 7% p.a. The government also provides interest aid of 3% p.a. to those who repay the loan on time which means the loan is actually offered at 4% p.a. Loans above Rs 3 lakh are offered at higher rates but the lenders have to follow the norms of the Reserve Bank of India and government directive, all the same. In the loans with maximum limit of Rs 1 lakh, no security is needed but loan above this limit could have a security but it differs from lender to lender. Any farmer, small or big, can apply for agri loan and avail it from lenders in the market. The loan can be short-term or long-term with both being the beneficiary of low interest rates.
The agriculture or dairy loan interest rate is subsidized by the government as it wants to help farmers and agriculturists. It is a form of incentive as well as aid for the distressed farmers so that they do not suffer and find the motivation to carry on with agriculture. They can use the loans to purchase land, equipment, or any other agriculture-related stuff. With low rates, farmers do not face problems and are able to repay the loan on time which also brings them the benefits of rebates. They can easily avail the loans as well because the lenders have ushered in faster loan processing and paperwork in the interest of farmers.
All the public banks in India offer agri loans to farmers at subsidized rates but the rates differ from one bank to another. Other financial institutions also offer credit schemes for farmers and overall, the market is favorable for agriculturists looking to avail a loan for their farming needs.
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