Tractor Loan: Benefits and Requirements

Tractor Loan: Benefits and Requirements

The most popular commercial and agricultural equipment loan in India is for tractors. Leading financial institutions are aware of the need to provide tractor loans for industrial and commercial operations. Being an agricultural piece of equipment, tractor loans are more popular in our nation’s rural and semi-urban areas. Loans for the purchase of new or used tractors are given to farmers or businesspeople as tractor loans. Both commercial and agricultural uses are possible for these tractors. To be eligible for a tractor loan, a farmer must own a minimum of three acres of farmland, though this requirement may differ from lender to lender.


Having a tractor is a need for farming and agricultural work. It also serves other functions. It serves the crucial function of getting agricultural products from farms to markets. Additionally, it aids in moving supplies from the market to the production location. It is also utilized in villages as a mode of transportation for people to get from one location to another. Numerous banks have recognized the necessity of financing this crucial equipment. This kind of loan is provided by NBFCs (Non-Banking Financial Companies) as well as other financial institutions. In India’s rural and semi-urban areas, loan is in high demand. While a bank may offer a vehicle loan to finance a tractor, the tractor loan

How to get the Tractor Loans?

Eligibility requirements

The majority of lenders provide tractor loans to both farmers and non-farmers who must meet the qualifying requirements listed below, though the requirements may differ from lender to lender.

Tractor loan for Farmers:

  • The applicant’s age must be more than 18 in order to qualify for a tractor loan for farmers.
  • When applying for support, the maximum age should be under 60.
  • The applicant must have a minimum of 3 acres of agricultural land and annual revenue of Rs. 1 lakh.

Criteria to Get a Tractor Loan for Non-Farmers

  • The applicant for a tractor loan must be at least 18 years old.
  • When applying for support, the maximum age should be under 60.
  • The applicant must have a minimum annual income of Rs. 1,50,000.
  • The applicant ought to be able to access a phone number under his or her name.

Important Things to Think About When Applying for a Tractor Loan:

Before applying for a tractor loan, there are a few important considerations that must be made.

Interest Rate: One of the most important considerations when applying for a tractor loan is the interest rate levied by the lender. For loans for tractors, the interest rate may start as low as 10.55 percent per annum and may reach a maximum of 23.95 percent per annum. After taking into account a number of variables, including the loan amount, loan term, and others, the lender decides on the interest rate. Your monthly financial repayment load will be lessened if you choose a loan with a low-interest rate.

Loan Duration: Although some lenders may only provide a maximum payback term of 5 years, the highest loan term permitted for tractor loans is 7 years. You will pay a lower interest rate overall if you choose a short payback term, but you will have to make larger EMI payments. Therefore, consider your ability to repay the loan, the maximum loan term allowed by the lender, and the tenure you choose.

Additional Fees: Your loan amount may be increased by additional fees such as processing fees, prepayment fees, documentation fees, etc. Therefore, choose a loan where the interest rate is competitive and take into account any additional fees.

Collateral: Whether or not you provide collateral depends on the lender you are borrowing from. Check the terms before approving a loan, thus.

Margin: Check the margin your lender has provided you when applying for a tractor loan. The majority of lenders offer loans up to 90% of the tractor’s cost, thus the borrower would be responsible for arranging the final 10% of the funds. Make sure you have the money you need to make payments on time in case the lender offers a greater margin.

How to Make a Tractor Loan Application?

Both online and offline applications are accepted for tractor loans. While some lenders allow clients to apply online through their official websites, others require that they visit their nearest branch in order to obtain such a loan. Make sure you are informed of the loan’s terms and circumstances before deciding on any tractor loans. Compare the various tractor loan alternatives offered by the lender and other lenders.

Procedure for Online Tractor Loan:

  1. Visit the lender’s official website.
  2. Choose “Apply Now” from the product page by clicking on it.
  3. Enter your information, including your name, address, phone number, home state, city, etc.
  4. online form submission
  5. When the application is further along, the representative will get in touch with you.

Procedure for Offline Tractor Loan:

  1. Visit the lender’s regional office.
  2. Submit the necessary paperwork with your information on it, such as your name, address, phone number, home state, city, etc.
  3. Apply for a loan at the local branch of the lender.
  4. Complete the application.
  5. Send it along with the necessary paperwork.

Documents needed by lenders to obtain loans for tractors

The following are typical documentation that borrowers must provide to lenders in order to obtain tractor loans:


  • Two current pictures of the candidate on a properly completed application form
  • Verifying a person’s signature by submitting a driver’s license, passport, PAN card, or bank statement
  • residence evidence
  • Proof of identity
  • Evidence of land ownership Constitutional information
  • Report on Land Valuation and Tractor Quotation from Dealer


  • legally valid loan agreements
  • Original dealer title search report for a tractor
  • A mortgage deed, if one is available,
  • Margin Money Received Comprehensive Insurance
  • Proof of Sub-Registrar Acknowledgement

Benefits of Tractor Loan:

These are the key benefits of getting a tractor loan:

Simple processing and purchase: Tractor loans are secured debts where the tractor is the security. As a result, the processing and disbursement of tractor loans are efficient.

Online transaction: The borrower has the choice to apply for this loan online. Physical verification will be done on the papers. Communications after the distribution are made by phone or email.

Low interest: This loan has a low-interest rate because it is a priority sector loan. Because it is related to agriculture, the interest rates are lower than those for car loans. While a car loan can be utilized to purchase a tractor or other commercial vehicle, the interest rate on a tractor loan is substantially cheaper. It is a more practical choice as a result.

Simple documentation: In the case of tractor loans, the documentation is very typical. Loans to priority industries and secured loans are approved more quickly. The typical evidence of identity, address, and income is needed to confirm the applicant’s legitimacy.

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