Loan Against Agricultural Land

A mortgage loan against agricultural land is a kind of credit given against land owned by the borrower. Usually, farmers procure this form of a loan. The maximum loan value offered by financial institutions is usually equal to the value of the mortgaged land.

This loan can be used for several purposes such as marriage, medical requirements, cultivation of crops, bearing expenses of cultivating machines, and so on.

Here’s a closer look at interest rates on loan against agricultural land. 

If you are considering applying for a loan against agri land, you must be well-informed about the eligibility criteria. Below are the details about the same.

• Your age must be between 21 years to 65 years. However, the eligible age varies from lender to lender.

• These loans are available to farmers, dairy proprietors, horticulturists, and any orchard proprietors

• Co-applicant is required if the land is owned by two persons

In order to avoid rejection, you must provide the required documents that are listed below.

• Identity proof (Aadhaar card, Voter Id card, Driving licence)

• Address proof (Aadhaar card, Utility bills, Passport, Ration card)

• PAN card

• Land documents, including tax slips, utility bills, registration papers, etc.

• Copy of land sale agreement

• Bank statement for last six months

• Passport size photographs

Here are the details about different fees and charges for loans against agricultural land. 

• Foreclosure Fee: This fee is applicable when the borrower pre-closes the loan by paying the outstanding amount before the loan term expires. However, this fee varies from lender to lender as some banks impose foreclosure fees while others do not.

• Processing Fee: It is a one-time fee that applies during the sanction of a loan. Each bank has its own processing fee. 

• Penalty for Delayed Payment: It is imposed when the loan EMI is not paid on its repayment date.

• Bouncing Fee: When a cheque submitted for a loan EMI payment bounces, this fee is imposed.

• Stamp Tax: It is implemented in accordance with the current state legislation. It is a one-time charge made at the moment the loan is disbursed.

• Documentation Fee: This charge is applied when the loan is sanctioned.

• Valuation Fee: It is used if the bank considers the borrower's residential, agricultural, or commercial property.