Agriculture has proven to be the most basic sector of human life for generations. It was there, it is still here, and it will always be there as long as there is human life on this planet. With the growing global population, agricultural products are in higher demand than ever before for practically everything. Every day, technology advances to meet the demands, and new modernized equipment that works faster and more effectively is developed. Tractors are one of the most fundamental agricultural machines. Tractors are expensive to maintain and purchase, which is why financial assistance is available in the form of tractor loans.
Are tractor loans exactly what they sound like?.
Tractor Loans are loans given to farmers or company owners to purchase new or used tractors. Tractors of this type can be used for both agricultural and commercial applications. To qualify for a tractor loan, a farmer must own at least three acres of agricultural land, however, this varies per lender.
What are the Important Considerations when Applying for a Tractor Loan?
Before taking out a tractor loan, there are a few things to consider.
The rate of interest paid by the lender for obtaining a tractor loan is one of the most important factors to consider. The interest rate on tractor loans may start cheap and then rise to a high percentage. The lender considers the interest rate after weighing numerous aspects such as the amount of the loan, the length of the loan, and so on. Taking out a low-interest loan will make your monthly financial obligations easier to manage.
Whether or not you must provide collateral depends on the lender from whom you are borrowing. So, before you sign a loan agreement, double-check the terms.
Tractor loans have a maximum loan period of 7 years, while certain lenders may provide a maximum payback term of 5 years. You will pay a reduced interest rate over the loan period if you choose a short payback term, but you will have to pay larger EMIs. So, look into the lender’s maximum loan term, as well as your ability to repay, before deciding on a term.
Other fees, such as processing fees, prepayment fees, documentation fees, and so on, could raise the amount of your loan. As a result, choose a loan with a low-interest rate and take into account any additional fees.
When getting a tractor loan, check the margin offered by your lender. Most lenders will finance up to 90% of the tractor’s cost, which means the borrower will have to come up with the remaining 10%. If the lender requires a bigger margin, make sure you have the finances available to make regular payments.
What are the benefits of a tractor loan?
You must possess a tractor to qualify for a loan against it. You are qualified to obtain a loan against your tractor if you have ownership documentation, such as your original License. Additionally, to qualify for a tractor refinance if you have an active tractor loan, you must have made at least 12 Installment payments. Furthermore, you may apply right away for a loan against a tractor if you don’t already have one.
The loan amount will be put into your bank account within a few, as opposed to weeks for a company loan. moreover, even if your present lender takes some time to provide the NOC in the event of an existing tractor loan, a large percent of the money will still be credited to your account right away, and the remaining will be transferred as soon as the NOC is received. So if you want money quickly, you can be confident that a loan against a tractor will provide you access to the money you need.
Very little documentation
stated that you must provide your original RC along with the paperwork for your refinancing tractor loan. Only a bank account statement, KYC paperwork, and a copy of your ID card are required addition to that. You must also present a 6-month bank statement from which the current EMI is paid if you already have a tractor loan.
In addition to requiring little documentation, taking a loan against your tractor or refinancing a tractor is made as simple as possible. Loan providers handle the difficult work and offer doorstep service so you may relax throughout it all.
Obtaining a loan against a secondhand tractor is really simple. Owning a tractor is the sole true requirement for eligibility for a loan secured by it. That’s not all, though. The actual loan application procedure is also made painless and even includes home service from our experts. The loan money is deposited to your bank account within a few days, unlike other loans where you may have to wait days to receive it.