Are you looking for a tractor loan? Looking for the best tractor loan deal? Then you have come to the right place. Tractors are critical to the success of farms and other agricultural endeavours. It is also utilised in a variety of ways. Many people get tractor loans to help them with their farming.
Several lending institutions, including banks and NBFCs, provide loans for this. This kind of tractor loan is extremely popular in rural and underserved parts of India. A vehicle loan from a bank might be used to purchase a tractor. But it is preferable to get a tractor loan that is suited to the borrower’s requirements and has better conditions.
Tractor Loan: A Brief Description
Farmers may acquire credit for items like tractor finance. This tractor loan may be applied for by either an individual or a group. This loan is similar to a vehicle loan. If the borrower fails to make payments, the loan will be terminated. The tractor will be repossessed.
Conditions for Obtaining a Tractor Loan
The rules for obtaining a tractor loan may vary depending on where you get the loan. However, there are a few ground principles:
- Any Indian citizen or permanent resident may apply for a tractor loan.
- A single person, a group of persons, or both may apply for a loan.
- Anyone, whether a person or a corporation, may apply for this tractor loan.
- You must demonstrate that you have a steady source of income and the ability to repay the loan.
- You must own at least two acres of property.
A Tractor Loan’s Important Components
The following factors distinguish tractor loans from other types of loans:
- The margin percentage for a tractor loan begins at 15%.
- The tractor and its equipment serve as collateral for the loan.
- In India, tractor insurance is essential. It may be obtained through the bank that gave the money or from any other respectable insurance firm.
- All of the tractor’s accessories will secure the loan.
- Land might be used as additional security for a bank loan or financing.
- These tractor loans’ annual percentage rate (APR) must be less than 12%.
- The maximum amount of time you may borrow is seven years with a one-month grace period.
- Payment options fluctuate from lender to lender. But they are often paid monthly, quarterly, or every six months.
- The fees for obtaining this kind of loan are typically about 0.5 percent of the amount borrowed.
- You may borrow up to 90% of the tractor’s purchase price.
- Low-interest rates, payback periods ranging from 12 to 84 months, and various flexible payment alternatives are among the terms and conditions (post-dated checks, standing instructions, electronic clearing system, etc.).
- Some financial organisations provide additional coverage on top of what the customer currently has. This is in the event of death or a complete and permanent disability.
- Most banks will lend money to purchase tractors without requiring collateral.
- Anyone who satisfies the requirements and can show who they are and how much money they earn is eligible to apply for a tractor loan. Farmers aren’t the only ones who can acquire these kinds of loans.
Advantages of a Tractor Loan
Here are some of the essential benefits of obtaining a tractor loan:
- Methods that are simple to grasp and learn: Tractors may be used as collateral for loans in the form of tractor loans. These are instances of secured loans. This makes it easy to apply for and get a tractor loan.
- Purchase via the internet: Anyone interested in this financing might apply for it online. The authenticity of the papers will be determined by inspecting them. Any other communication, such as money transfers, is done via phone or email.
- A low-interest rate, on the other hand: This money is part of a credit package for high-demand sectors. It is used in agriculture. So the financing rates are much lower than those for automobiles. While you may acquire a tractor loan for any vehicle, tractor loans have lower interest rates than ordinary car loans. As a result, this is the best option.
- Streamlining paperwork: Obtaining a tractor loan typically requires normal documentation. Priority sector loans and secured tractor loans, in particular, have substantially quicker processing timeframes. You can determine if an application is genuine by requesting evidence of identity, a utility bill showing your current residence, and a pay stub displaying your current salary.
Documents Required to Get a Tractor Loan
The following is a list of the documents you will need to get a tractor loan. Even though the specifics vary depending on the supplier, you will always require the papers listed below.
- Evidence of your identity: Any government-issued photo ID and the Bank Sign Verification are acceptable forms of identification.
- A driver’s licence, an Aadhar card, a voter ID card, a marksheet, or any other official document with your birth date is a fantastic approach to establishing who you are.
- Documents in possession: Possession Letter, Sales Receipt, Tax Receipt, Water Bill, and Electric Bills
- Providing evidence of earnings: Your past six months’ tax return and financial records All the things listed above, as well as a completed application and a current picture, are required for the tractor loan.
Since money issues continue to arise, many farms and companies cannot purchase tractors. So, applying for a tractor loan is the best course of action. The interest rate on a tractor loan might range between 8% and 20%. Interest rates are determined by various factors, including a borrower’s CIBIL score and collateral amount. The majority of loans are repaid over a one to seven-year period.
A team of knowledgeable advisers from Piramal Finance is available to assist you at every stage of the application process. This boosts your chances of being accepted and receiving your funds soon. Piramal Finance is one of India’s top non-bank finance organizations. Piramal Finance’s specialised staff of professionals is accessible 24 hours a day, 7 days a week, to assist existing and new clients.