Nowadays, loans have become popular amongst people and businesses. Whether it is buying a house or buying machinery for the business, loans are available for everything. No one wants to block his or her funds by paying the entire amount to purchase something in a one go. Banks and other financial institutions have started offering loans wherein they lend money on certain terms and conditions, which in turn allows the person taking the loan to own the item, he wants. Payments are done in monthly instalments distinguished over a period of time.
Farming has become an organized sector and the tools and equipment now used to cultivate land have become technologically advanced. Thereby, reducing the physical labour. Farmers, now, desire to have the latest tools so that the hard work of being in the fields and working relentlessly is eliminated. These latest equipment get the job done in no time and do not even need to hire extra workers. All you need is one or two person to operate the machines. Tractors are one such vehicle which is essential to farming and save you from actually digging the land yourself, which can take a number of days and requires hiring extra workers. Banks and other institutions have realized this and come out with tractor loans, making it easier for farmers to buy tractors for their lands. However, there are certain eligibility requirements and documents that need to be submitted in support, that you fulfil the criteria and have the ability to repay the loans.
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Eligibility
Banks require the person applying for tractor loans to meet the following eligibility requirements: –
- Some banks require ownership of certain acres of land
- Income even from agriculture is considered to assess whether the person taking the loan will be able to repay the loan amount.
- Commercial income is considered too.
- Some institutions have set a minimum age and maximum age for people taking the loan.
If the eligibility is met, there are documents that need to be provided which support your eligibility to enable the banks to go ahead with the loan. The institution will explain you all the documents that are required and on submission an agreement is signed, which contains all the terms and conditions such as the amount of loan, interest rate, repayment options, and so on. Apart from banks, tractor loans can also be taken from the dealers from whom you intend to buy the tractor. Usually, the dealers have tie-ups with other financing company and hence, it becomes easier to get financing from them.
Cost of a loan
Before deciding to take tractor loans, it is obvious one would wonder how much it would cost. There are many factors regarding this aspect such as, if you are getting a new or a used tractor finance. Usually, a new one carries lesser interest rate, whereas, a used one would carry a slightly higher interest rate. Apart from taking tractor loans, there is also an option of leasing tractors where the ownership of the tractor remains with the company providing the money and the farmer or person renting the tractor has the possession. After a certain period of time, the equipment is returned. This leasing cost less on a monthly basis, but maybe in the long run over a period of time, it turns out to be more expensive. However, it is still a viable and most preferred option.
Overall, tractor loans appear to be a good option to get the latest technology and make life easier. So, why not go ahead with it if you are planning to buy a tractor.