A large part of the Indian population still lives in rural areas and depends on agricultural activities to sustain their living. Technology has permeated the agriculture sector with manufacturers offering different types of equipment to make farming easier and quicker.
Most farmers use tractors to cultivate their lands. However, some farmers are unable to buy one as they lack the necessary money required for such a large purchase. Financial institutions like banks and Non-Banking FinancialCompanies (NBFCs) understand this deficit and offer attractive loans to enable more farmers to buy tractors and other agricultural equipment.
Here are some benefits and features of tractor loans:
- Fast and hassle-free approval and disbursal of loans within a short period of time
- Simple and flexible documentation requirements
- Repayment may be done in monthly, quarterly, or half-yearly installments based on the borrowers’ cash flows
- No additional collateral like the land is required to avail of the loan
- At the end of the loan duration, the tractor is released from all charges offering complete ownership to the borrowers without any encumbrance
- Loans are available for tractors manufactured by different companies
Any individual who already owns a tractor or is desirous of buying one is eligible to apply for finance for tractors. Documentation requirements for such loans are simple and minimal, which makes the entire procedure quick and hassle-free.
Here are the basic documents that are required when you apply for a loan:
- Know-your-customer (KYC) documentation, which includes identity proof and address proof such as Permanent Account Number (PAN) card, Aadhar card, voter’s identity, driving license, passport, utility bills, lease agreement, and home purchase agreement
- Income proof in the form of a bank statement to determine the quantum of loan that may be sanctioned to ensure borrowers are able to repay the money without any financial difficulties
Financial institutions have further simplified the process of applying for such loans. Borrowers may apply either through the wide network of available branches or make an online application. With minimal documentation and no additional charge on the land, lenders provide sanction within two working days. This ensures that there are no unnecessary delays.
When an individual applies for these types of loans, he is required to make some down payment. This is the difference between the total price of the tractor and the amount sanctioned as tractor finance. Borrowers may opt for a higher or lower down payment based on their financial situation and the available liquidity. Most lenders customize loans to meet the specific requirements of individual borrowers.
Financial institutions offer repayment duration between three months and five years. This allows borrowers to customize their Equated Monthly Installment (EMI) schedule based on their income. Such flexibility ensures individuals do not face any liquidity crises while servicing the loan in a timely manner. An online tractor loan EMI calculator is beneficial for borrowers to understand the approximate installment they will have to pay on the borrowed amount during the loan duration.
There are a large number of funding options available and individuals are recommended to take some time in researching the various options. Using a tractor loan calculator to determine the borrowed amount and the estimated EMI is beneficial to help borrowers make informed decisions.