Close to 58 % of India’s population depends upon agriculture as their primary source of livelihood. India ranks second in the world when it comes to farm output, however, the Indian farmer is still beset with manual labor and high operational costs. This is where technology could be a game-changer for farmers. Farm equipment such as tractors could play a vital role to help India achieve a target of doubling farm income by 2022.
Close to 6 to 7 lakh tractors are sold every year in India, making this the largest category of farm equipment. Today, India is not only the biggest manufacturer but also the biggest market in the world for tractors. The tractor market is growing at a compounded annual growth rate (CAGR) of 8 to 10 %. Tractor Loans are loans taken out by farmers or businessmen to buy new or pre-owned tractors.
Various Banking Options and Schemes
There are two options for obtaining tractor finance.
First, visit various tractor finance companies to get a fair knowledge of the schemes and offers they provide; leading to an edge over other variants.
Second, visit the dealership and consult the finance representatives of banks present in the dealership.
Features of tractor loan
• No security or collateral required
• Ease of documentation
• Faster approvals
• Hassle-free transaction
• Attractive rates of interest
• Both farmers and non-farmers may apply
• Pay back your loans via postdated cheques or cash collection
Eligibility for tractor loan
• You are a farmer and own at least 3 acres of land
• Agriculture income is considered if you are a farmer applying for this loan product
• Commercial Income is considered if you are a non-farmer applying for this loan product
Applying for Finance
In order to avail of tractor finance, the buyer must fill the form and meet eligibility requirements published by the bank. The approval may require the submission of some documents.
A host of a Visit (First Investigation)
A visit is then made by an official of the bank. The official visits to check certain criteria as the property owned, the living standard, personal behavior, social behavior, economic status, etc.
Sign the agreement of the Tractor Finance availed and other declarations regarding repayment options and tenure. The bank then checks the CIBIL score of the buyer and checks final eligibility, on the satisfaction of which the buyer is asked to submit Signature, Photocopy of Passbook and 3-5 Post Dated Checks, for bank’s use.
Call from the Credit Department
Finally, the Credit department of the bank makes a call of verification in order to recheck all the details concerned (amount of loan, EMI, duration) along with a confirmation that the buyer is not forced to opt for tractor finance.
On completing all the procedures and on meeting all the above requirements, tractor finance is finally processed and the amount is credited to the dealer.
Obtaining finance for a Tractor has become very easy and efficient through modern banking techniques, this is why tractor finance is widely used these days.
29-Dec-2020 | Answer by: Ram