Loan on Property

Agriculture Land Loan: How to Buy Farmland in India

By Tata Capital
06 January 2026
9 mins read
1949

What is an Agriculture Land Purchase Loan?

For farmers looking to expand their business or take on new ventures, buying land involves high costs, where taking a loan for agriculture landmight become important. The goal of agri land purchase loans is to offer financial assistance and workable solutions that are specific to the needs of farmers. These loans are available in several forms and support various aspects of funding agricultural activities in India.

Features like flexible repayment plans, competitive interest rates, government-backed subsidies, and agricultural loans give farmers the funds they need to meet their goals and boost their productivity.

In this article, we will discuss how to obtain a loan to buyagricultural land in detail and the various options available.

Key Benefits of a Loan for Agriculture Land

1. Land acquisition

You can purchase land with the help of farm land loans, which offer the required financial support. These loans for agriculture land can help you fulfil your dream of owning farmland, whether it is to expand an already-existing farm or buy a new one.

For instance, if you want to expand your farm by buying an additional acre, you can use the loan for agriculture landto finance the purchase, which will help you increase your crop production and income.

2. Flexible repayment tenure

Agricultural loans feature flexible repayment tenure to help you repay the loan comfortably. You can choose a tenure that best suits your financial needs, depending on the harvest season. Longer repayment terms might ease the burden on you and provide you with more time to make a profit.

For example, if you are growing paddy, you can select a repayment schedule that aligns with the harvest season. This ensures that you have enough time to sell your produce and have access to enough funds to repay the loan for agriculture land.

3. Competitive interest rates

Loans for farm land are often available at competitive interest rates, making them an attractive choice. The better the interest rates you can fetch, the lower the total cost of borrowing will be, making it easier to repay the agri land purchase loan.

4. Collateral options

Agricultural loans can be either secured or unsecured, depending on the lender. Agri land purchaseloans might need to be secured with the land you’re buying with the loan or other assets as collateral, while other loans might be approved based only on the borrower’s creditworthiness.

You must explore the various loans offered by different lenders and their collateral requirements to apply for a loan for agriculture land that best suits your needs.

5. Government support

To help farmers, the Indian government offers a number of programs and subsidies. Among these are provisions for agricultural loans with subsidies, which make it simpler and more economical for farmers to obtain financing for the purchase of agricultural land.

Eligibility Criteria for Agriculture Land Loan in India

1. The minimum age requirement for applicants is 18, while the maximum age may differ based on the lender’s requirements.

2. A minimum number of years of farming experience may be required by certain lenders. On the other hand, applicants for these agri land purchaseloans who are employed full-time may also be prospective farmers.

3. Depending on the lender’s requirements, you might have to submit a lease agreement for the land you want to purchase or proof of land ownership.

Eligibility for Small & Marginal Farmers, Tenant, and Women Applicants

Marginal farmers must own up to 1 hectare of land to get an agriculture land loan in India.
Small farmers should own more than 1 and up to 2 hectares to apply for a loan for agriculture land.
Tenant farmers, sharecroppers, and landless labourers are also eligible through SHGs or JLGs.
Loans are available for allied activities up to Rs. 2.5 lakh, even without land ownership.
Farmer producer groups and cooperatives qualify if mostly small and marginal farmers are members.
Women applicants follow the same rules: minimum age 18, basic farming experience, and land ownership or lease proof.

Documents Required for Agriculture Land Purchase Loan

1. Identity proof: Documents like your Aadhar Card, PAN card, Voter ID, or Passport to verify your identity.

2. Address proof: Documents such as a Voter ID, Passport, or utility bills (e.g., electricity or water) showing your current address.

3. Proof of land ownership or lease agreement: If applicable, you must present paperwork, such as sale deeds or signed contracts with the landowner, attesting to your ownership of the land or the terms of the lease.

4. Income proof: Documentation such as income tax returns, salary slips, or bank statements attesting to your ability to repay the agri land purchaseloan.

5. Agricultural land records: Documents containing information about the land, such as its location, size, and any relevant legal clearances; these may include revenue records or land survey reports.

Types of Agriculture Land Loans in India

1. Agriculture term loans

Similar to standard term loans, agricultural term loans require monthly repayments from the borrower over the course of a predetermined length of time. Both short-term and long-term demands can be satisfied with these loans.

2. Kisan credit cards (KCC)

You can pay for seasonal farming expenses like purchasing seeds, fertiliser, and pesticides with Kisan Credit Cards. You can easily obtain credit using these cards whenever you need it.

3. Agricultural gold loans

These loansto buy agricultural land function similarly to conventional gold loans, in which the borrower keeps gold as collateral. The main difference is that agricultural gold loans are specifically available to farmers.

4. Agriculture working capital loans

Loans for working capital are intended to cover the significant overhead associated with farming. Like term loans, you repay them in instalments.

5. Farm mechanisation loans

If you want to purchase or improve farm equipment, such as solar panels, irrigation systems, or tractors, you can apply for farm mechanisation loans.

6. Horticultural loans

Horticultural loans cater to farmers who want to plant more plants or increase the size of their current garden. These loans also cover the cost of building fences or clearing land.

7. Loans for animal rearing

This form of loan is available to farmers who are active in fish farming, beekeeping, or animal husbandry, such as raising chickens, goats, or sheep.

Top Agriculture Land Loan Schemes & Lenders in India

India offers several loan schemes and lenders to support farmers and agriculture-related needs. Some of the key options include:

1. Kisan Credit Card (KCC)

KCC gives farmers quick access to credit for crop cultivation and farm expenses. The loan limit depends on land size and crops grown. Farmers can withdraw money as needed and repay flexibly.

2. Pradhan Mantri Fasal Bima Yojana (PMFBY)

PMFBY mainly provides crop insurance, but it also supports farm loans by covering crop risks. Subsidised premiums further help farmers stay protected against natural disasters and crop losses.

3. Rashtriya Krishi Vikas Yojana (RKVY)

RKVY supports farming through state-led projects. It funds irrigation, modern equipment, food processing, and agri-startups, helping farmers improve productivity and income.

4. National Mission on Agricultural Extension and Technology (NMAET)

This scheme helps farmers adopt new farming methods and technologies. Loans and support improve yields and farm profitability.

5. Private lenders like Tata Capital

Tata Capital’s loans against property offer high loan amounts, long repayment periods, and flexible usage for farming, business, or personal needs.

Interest Rates, Loan Amounts & Repayment for Agricultural Land Loans

Agricultural land loans help farmers and eligible applicants buy farmland, usually close to where they already live or farm. Most lenders do not fund the full cost of the land. Instead, they typically cover 70% to 80% of the land value, and you need to pay the remaining amount as a down payment.

Interest rates on agricultural land loans usually fall between 7% and 12% per year, depending on the lender, loan amount, and borrower profile. These loans often come with long repayment periods, sometimes up to 15 years, to reduce the burden on farmers.

Repayment is generally flexible. Many lenders align instalments with harvest cycles, allowing farmers to repay after selling crops. Such loans are offered by public and private lenders, NBFCs, and through central and state government schemes.

How to Apply Step-By-Step for an Agriculture Land Purchase Loan

You can get a loan to buy agricultural land by following these steps:

Step 1: Research and Choose a Loan

Compare interest rates, repayment periods, prepayment charges, and eligibility criteria. Pick the loan that suits your needs and financial plan.

Step 2: Prepare Documents

Keep your KYC, income proof, farming experience details, and all legal papers related to the land ready.

Step 3: Submit the Application

Apply online, at a branch, or directly with the lender. Many lenders also offer fully digital application processes.

Step 4: Loan Processing and Verification

The lender checks your documents, verifies land ownership and legal status, and assesses your creditworthiness.

Step 5: Approval and Disbursal

Once approved, the loan amount is given to the seller or your account as agreed.

Key Things to Check Before Buying Farmland on Loan

Before applying for a farmland loan, make sure to check three key things:

1. Business Plan

Lenders need to see a detailed plan showing what you want to do, how you will invest, and how you will repay the farmland loan. Include your background, goals, and farming strategy.

2. Financial Statements

Lenders check your ability to repay. Keep income statements, cash flow details, balance sheets, and past business history ready for review.

3. Collateral

Collateral is an asset you pledge to the lender in case of default. Having valuable assets, even non-farm ones, improves your chances of farmland loan approval and shows repayment security.

Government Subsidies and Priority Sectors in Agriculture Land Loans

Kisan Credit Card (KCC): Provides quick, flexible farmland loans based on land size and crops.

Pradhan Mantri Fasal Bima Yojana (PMFBY): Offers subsidised crop insurance and farmland loan support for premiums.

Soil Health Management (SHM) Scheme: Supports sustainable farming and soil fertility improvements.

Interest Subvention Scheme: Reduces interest on agricultural loans, making borrowing cheaper.

Rashtriya Krishi Vikas Yojana (RKVY): Funds modern tech, irrigation, processing, and agri-startups via states.

National Mission on Agricultural Extension and Technology (NMAET): Provides loans to adopt best practices and new farming technologies.

Priority sectors: Loans target farmers, SHGs, and JLGs to support agriculture and allied activities efficiently.

Conclusion

Loans for agriculture are important financial instruments that help farmers buy land, grow their businesses, and make investments in supplies. With customisable collateral alternatives, affordable interest rates, and flexible repayment options, these loans give farmers the chance to expand their farming activities.

Agricultural loans provide the capital support required for long-term success, whether the funds are used for land acquisition or equipment upgrades. You can also manage your investments in agricultural land with the customised credit options offered by Tata Capital.

Tata Capital offers a range of loan solutions to help farmers meet their goals efficiently and affordably. Apply for a loan against property with Tata Capital to make the most of your property and meet your financial needs efficiently.

FAQs

Which banks and institutions offer agriculture land purchase loans in India?

Public and private lenders, NBFCs, cooperatives, and some government agencies provide agricultural land purchase loans.

What is the rate of interest for agriculture land loans in India?

Interest rates generally range between 7% and 12% per annum, depending on the lender and borrower profile.

Is it possible to get a loan for buying agricultural land as a first-time farmer?

Yes, first-time farmers can apply if they meet eligibility criteria, provide the required documents, and have repayment ability.

What are the key documents required for an agriculture land purchase loan?

KYC, income proof, land ownership or lease documents, and financial statements are typically required.

Are there special government schemes or subsidies for loans to buy agricultural land?

Yes, schemes like KCC, PMFBY, RKVY, SHM, and Interest Subvention provide support and lower interest for farmers.

Can non-farmers or companies get a loan to buy agricultural land?

Generally, loans to buy agricultural land are for farmers and related groups; non-farmers or companies usually cannot borrow for farmland.

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