What Is Agriculture Gold Loan: Interest Rate Comparison

Did you know that gold can be used for more than just jewellery? It can also be used in farming. In today’s article, we’ll look into Agriculture Gold Loans and compare interest rates to help you make smart choices.

Whether you are a farmer wanting to grow your business or an investor interested in the farming sector, it is important to know how Kisan Agriculture Gold Loans and the interest rates offered by SBI in 2023 work. So get a shovel and get ready to dig into this interesting subject!

Table of Contents show

What Is Kisan Agriculture Gold Loan?

The Kisan Agriculture Gold Loan is a financial product designed to provide agricultural and farming-related financial assistance to farmers and individuals engaged in agriculture. This loan is secured by pledging gold ornaments, jewellery, or gold coins as collateral. Here are the key features and details of a Kisan Agriculture Gold Loan:

1. Collateral: As mentioned, the loan is secured against gold ornaments, jewellery, or gold coins. The loan’s value is determined based on the purity and weight of the gold provided as collateral.

2. Purpose: The loan amount can be used for various agricultural purposes, including buying seeds, fertilisers, pesticides, agricultural equipment, and other working capital needs related to farming and agriculture.

3. Eligibility: Typically, individuals engaged in agriculture, such as farmers, agricultural labourers, and allied agricultural activities, are eligible for Kisan Agriculture Gold Loans.

4. Loan Amount: The loan amount can vary based on the market value of the gold pledged. Generally, you can get a percentage of the gold’s value as the loan amount. The exact percentage can differ from one lender to another.

5. Repayment: The loan is repaid in fixed instalments over a specified period. The repayment terms and interest rates can vary depending on the lending institution.

6. Interest Rates: The interest rates for Kisan Agriculture Gold Loans can vary among different banks and financial institutions. They are usually competitive compared to unsecured loans due to the collateral provided.

7. Tenure: The loan tenure or repayment period can also vary but is typically short to medium-term, ranging from a few months to a few years.

8. Quick Processing: One of the advantages of Kisan Agriculture Gold Loans is that they usually have a quick and straightforward approval process, as the loan is secured by collateral.

9. Security of Gold: The lender securely stores the gold items pledged as collateral during the loan tenure. The borrower can retrieve their gold items once the loan is repaid in full.

10. Risk: Borrowers must be aware that in the event of their failure to repay the loan within the mutually agreed-upon conditions, the lender retains the right to conduct an auction of the gold to recoup the remaining balance.

Kisan Agriculture Gold Loans provide farmers with a convenient way to access funds for their agricultural needs while utilising their gold assets as collateral. Nevertheless, it is vital for borrowers to thoroughly evaluate their capacity to repay the loan to mitigate the potential hazard of forfeiting their gold possessions via the auction procedure.

It’s advisable to compare loan offers from different lenders to find the most suitable terms and interest rates for your specific requirements.

Kisan Gold Loan Interest Rate

Kisan Agriculture Gold Loans’ interest rates can vary among banks and financial institutions. Here are some examples of the interest rates offered by various banks and financial institutions in India for Kisan Agriculture Gold Loans:

Bank of Maharashtra : 7.00% interest rate with no processing fee.
Indian Bank: 7.00% interest rate with no processing fee.
Union Bank : 7.20% interest rate with no processing fee.
Bank of Baroda : 7.70% interest rate with no processing fee for loans up to Rs. 3 lakh. For loans above Rs. 3 lakh, a processing fee of 0.25% plus GST is charged.
SBI : 8.25% interest rate with no processing fee.
Federal Bank : 8.50% interest rate with a processing fee ranging from Rs. 250 to Rs. 1500.
South Indian Bank : 8.85% interest rate with no processing fee.
Kerala Gramin Bank : 11.99% interest rate with no processing fee.
Axis Bank: 13.00% interest rate with a processing fee of 0.50% plus GST.

It should be noted that the interest mentioned above rates are subject to potential fluctuations and might differ depending on factors such as the loan amount, loan duration, and the specific policies of the lending institution.

Borrowers should inquire with the respective banks or financial institutions for the most up-to-date interest rates and terms before availing of a Kisan Agriculture Gold Loan.

Additionally, the choice of lender should consider various factors, including interest rates, processing fees, and repayment options, to determine the most suitable option for their specific needs.

Sbi Agriculture Gold Loan Interest Rate 2023

The State Bank of India (SBI) offers the SBI Multi-Purpose Gold Loan with an interest rate of 8.25% and does not charge any processing fee. Here are the details of the SBI Multi-Purpose Gold Loan:

Loan Product: SBI Multi-Purpose Gold Loan
Interest Rate: 8.25% per annum
Processing Fee: No processing fee

Loan Amount: The loan amount can vary depending on the value of the gold ornaments pledged as collateral. Typically, you can avail of a loan ranging from Rs. 1,000 to Rs. 10 crore, with the loan amount determined based on the quality and quantity of the gold items you pledge.

Repayment Options: SBI offers flexible repayment options for the Multi-Purpose Gold Loan. Borrowers can choose between lump-sum repayment or Equated Monthly Installments (EMI) based on convenience and repayment capacity.

Tenure: The SBI Multi-Purpose Gold Loan loan tenure can vary and typically starts from a minimum of 1 month to a maximum of 36 months. Borrowers can select the loan tenure that suits their repayment ability.

Eligibility: Eligibility criteria may include a minimum age requirement of 18 years. Specific eligibility requirements can vary, so checking with SBI for detailed eligibility criteria is advisable.

Documents Required: To apply for the SBI Multi-Purpose Gold Loan, you will generally need to provide the following documents:

Simplified application form
KYC (Know Your Customer) documents
Land documents (if applicable)
Security Post-Dated Cheques (PDCs)
Any other document as per sanction conditions

Please note that interest rates and loan terms are subject to change and may vary over time. Before applying for the SBI Multi-Purpose Gold Loan in 2023, verifying the prevailing interest rates and terms by consulting SBI or accessing their official website for the most recent and accurate information is imperative.

Furthermore, before obtaining the loan, it is imperative for borrowers to thoroughly examine the loan’s terms and conditions, encompassing aspects such as the interest rate, repayment alternatives, and any accompanying charges.

SBI Agriculture Gold Loan Maximum Limit

The maximum loan limit for agriculture gold loans offered by various banks can vary based on factors such as the weight and market value of the gold ornaments pledged as collateral. Here’s a summary of the maximum loan limits for agriculture gold loans from different banks:

SBI:

Maximum Limit: Depends on the weight of gold.
Tenure: 12 months (for term loan) / 3 years (for overdraft)

Axis Bank:

For Term Loan: From Rs. 25,001 to Rs. 20 lakh.
For Overdraft: From Rs. 2 lakh to Rs. 25 lakh.
Tenure: 12 months.

Union: Bank

Priority Sector: Up to Rs. 20 lakh.
Non-Priority Sector: Up to Rs. 10 lakh.
Tenure: 6 months (for priority sector) / 12 months (for non-priority sector).

Federal Bank:

Maximum Limit: From Rs. 1,000 to Rs. 1.5 crore.
Tenure: 6 months / 12 months.

Bank of Baroda:

Maximum Limit: Up to Rs. 25 lakh.
Tenure: Maximum 12 months.

IDBI:

Maximum Limit: From Rs. 10,000 to Rs. 5 lakh.
Tenure: Minimum 1 month / Maximum 24 months.

Bank of Maharashtra:

Maximum Limit: Up to Rs. 20 lakh.
Tenure: Flexible.

South Indian Bank:

Maximum Limit: From Rs. 5,000 to Rs. 10 crore.
Tenure: 6 months / 12 months.

Kerala Gramin Bank :

Maximum Limit: Up to Rs. 3 lakh.
Tenure: 12 months.

Indian Bank:

Maximum Limit: 85% of the market value of gold jewels.
Tenure: 6 months.

Please note that the maximum loan limits mentioned above are subject to change and may vary based on the bank’s policies and the quality and quantity of gold ornaments provided as collateral. Before applying for an agriculture gold loan, it’s essential to check with the respective bank for the most up-to-date information on maximum loan limits and other loan terms and conditions.

Which Bank Is Best For Agriculture Gold Loan

The optimal bank for an agriculture gold loan may differ based on individual requirements, personal inclinations, and eligibility criteria. Each bank has its terms, interest rates, and features. Here is an analysis of some popular banks in India that offer agriculture gold loans:

State Bank of India (SBI):

Interest Rate: 8.25%
Maximum Limit: Depends on the weight of gold
Special Features: No processing fee

Pros: SBI is a well-established and government-backed bank with a vast network of branches. The interest rate is competitive, and there is no processing fee.

Cons: The maximum loan limit depends on the weight of gold, which may vary.

Axis Bank:

Interest Rate: Starting from 7.00%
Maximum Limit: Up to Rs. 25 lakh (for overdraft)
Special Features: Competitive interest rates and flexible overdraft facility

Pros: Axis Bank offers competitive interest rates and flexibility with overdraft options.

Cons: The interest rate may vary based on the loan amount and other factors.

Union Bank of India:

Interest Rate: Starting from 7.20%
Maximum Limit: Up to Rs. 20 lakh (priority sector)
Special Features: Priority sector loans available

Pros: Union Bank offers priority sector loans for agriculture, which can benefit farmers.

Cons: Interest rates may vary, and non-priority sector loans have lower limits.

Federal Bank:

Interest Rate: Starting from 8.50%
Maximum Limit: Up to Rs. 1.5 crore
Special Features: Offers higher loan limits

Pros: Federal Bank offers higher loan limits compared to some other banks.

Cons: Interest rates are relatively higher.

Bank of Baroda:

Interest Rate: Starting from 7.70%
Maximum Limit: Up to Rs. 25 lakh
Special Features: Competitive interest rates

Pros: Bank of Baroda offers competitive interest rates for agriculture gold loans.

Cons: The maximum loan limit may vary based on factors.

South Indian Bank:

Interest Rate: Starting from 8.85%
Maximum Limit: Up to Rs. 10 crore
Special Features: High loan limits

Pros: South Indian Bank offers relatively high loan limits for agriculture gold loans.

Cons: Interest rates are on the higher side.

Kerala Gramin Bank:

Interest Rate: 11.99%
Maximum Limit: Up to Rs. 3 lakh
Special Features: Targeted at rural customers

Pros: Suitable for rural customers, but interest rates are relatively high.

Cons: Limited maximum loan limit.

Ultimately, the best bank for an agriculture gold loan depends on your requirements, including the loan amount needed, interest rate preferences, and eligibility.

It’s essential to compare the terms, interest rates, and other features different banks offer and choose the one that best aligns with your financial needs and goals. Furthermore, it is advisable to consider variables such as the bank’s reputation and the convenience associated with the application procedure when formulating your selection.

Agriculture Gold Loan Interest Rate In Bank Of Baroda

Bank of Baroda offers agriculture gold loans with the following details:

Interest Rate: Starting from 7.70%
Maximum Limit: Up to Rs. 25 lakh
Special Features: Competitive interest rates

Pros: Bank of Baroda offers competitive interest rates for agriculture gold loans.

Cons: The maximum loan limit may vary based on factors.

Bank of Baroda’s competitive interest rates can benefit farmers and individuals seeking agriculture gold loans. However, it’s essential to note that the maximum loan limit may vary depending on various factors, including the weight and value of the gold ornaments or assets pledged as collateral.

To get the most accurate and up-to-date information on the interest rates, maximum loan limits, and other terms and conditions for Bank of Baroda’s agriculture gold loans, it is recommended to visit the official Bank of Baroda website or contact the nearest Bank of Baroda branch.

They will be able to provide you with specific details tailored to your loan requirements and eligibility. Additionally, you can inquire about any additional charges, documentation requirements, and the loan application process while interacting with the bank’s representatives.

Agriculture Gold Loan Interest Rate In Union Bank Of India

Interest Rate: Starting from 7.20%
Maximum Limit: Up to Rs. 20 lakh (priority sector)

Pros for Farmers: The availability of priority sector loans means farmers can access financial resources with potentially more relaxed eligibility criteria and better loan terms. This can be a significant advantage for those engaged in agriculture.

Cons to Consider: It’s important to note that interest rates may vary based on factors like the loan amount, tenure, and prevailing market conditions. Additionally, non-priority sector loans may have lower maximum limits, so borrowers should carefully assess their eligibility and requirements.

Before applying for an Agriculture Gold Loan at Union Bank of India, farmers should consider their specific financing needs, repayment capacity, and loan terms to ensure they align with their agricultural goals and financial situation.

Agriculture Gold Loan Documents Required

For an Agriculture Gold Loan, you will typically need the following documents:

Duly Filled Application Form: Commence the loan application process by duly filling out the loan application form supplied by the respective bank or lending institution. Ensuring that all the necessary fields are completed with precision is imperative.

Proof of Agricultural Land Ownership: You must provide documents establishing your ownership of the agricultural land for which you seek the loan. This can include land title deeds, property ownership records, or any relevant land-related documents.

Proof of Crop Cultivation: Along with land ownership documents, you should provide proof demonstrating that you are cultivating crops on the land. This could include receipts for seeds, fertilisers, or any agricultural equipment and photographs of your cultivated crops.

Identity Proof: You’ll need to submit a valid identity proof document. This can be any of the following:

Voter ID Card
PAN Card (Permanent Account Number)
Passport
Aadhaar Card
Driver’s License
Any other government-issued photo ID

Address Proof: You’ll also need to provide a document that serves as proof of your residential address. Acceptable address-proof documents may include the following:

Voter ID Card
Passport
Aadhaar Card
Driver’s License
Utility bills (such as electricity or water bills) in your name
Rental agreement or property tax receipt

Please note that the document requirements may vary slightly depending on the lending institution and local regulations. Check with the specific bank or financial institution where you plan to apply for the Agriculture Gold Loan to ensure you have all the necessary documents to expedite the loan application process.

Agriculture Gold Loan Eligibility

To be eligible for an Agriculture Gold Loan, applicants typically need to meet the following criteria:

KYC Guidelines: Fulfill the Know Your Customer (KYC) guidelines as the lender requires. This involves providing valid identity and address proof documents.

Age Criteria: The minimum age requirement is usually 18 years, and the maximum age limit is typically 65 years. This can vary slightly between lenders.

Engagement in Agriculture or Allied Activities: Applicants should be engaged in agriculture or allied activities. These activities should fall under the categories permitted by the Government of India (GOI) or the Reserve Bank of India (RBI) to be classified under the agriculture sector.

Ownership of Gold Ornaments/Jewelry: To be eligible for the loan, prospective applicants must demonstrate ownership of the gold ornaments or jewels they intend to utilise as collateral. Additionally, some banks may accept specially minted gold coins sold by them as collateral, with a maximum limit per borrower (e.g., up to 50 grams).

Residential Status: The applicant should be an Indian resident.

Type of Facility: Agriculture Gold Loans are typically offered as Cash Credit and Demand Loans. The purpose of these loans is to cater to the immediate financial requirements of farmers and persons involved in agriculture and related industries.

Loan Purpose: These loans primarily aim to support agriculture and allied activities. However, they may also be available for other priority sectors defined by the RBI or government.

Please note that specific eligibility criteria and terms may vary between lending institutions. It’s essential to check with the bank or financial institution where you plan to apply for an Agriculture Gold Loan to understand their specific eligibility requirements and loan terms.

Streamlining the Agriculture Gold Loan Application Process: A Step-by-Step Guide

Streamlining the application procedure for Agriculture Gold Loans encompasses a series of crucial elements to facilitate a seamless and effective experience.

Here is a step-by-step guide:

Research Lenders:

Begin by researching banks or financial institutions that offer Agriculture Gold Loans. Compare interest rates, loan terms, and customer reviews to choose a reputable lender.

Gather Necessary Documents:

Collect all required documents, including a duly filled application form, proof of agricultural land, identity proof (Voter ID, PAN card, Passport, Aadhaar card, or Driver’s License), and address proof (Voter ID, Passport, Aadhaar card, or Driver’s License).

Check Eligibility:

Ensure you meet the lender’s eligibility criteria, including age requirements, engagement in agriculture or allied activities, ownership of gold ornaments/jewellery, and Indian residency.

Visit the Nearest Branch:

Visit the nearest branch of the chosen lender to initiate the loan application process. You can also check if the lender offers an online application option.

Consult Loan Officer:

Arrange a meeting with a loan officer at the financial institution to discuss your specific loan prerequisites. The loan officer will offer guidance during the application process and valuable insights into the loan terms.

Complete Application Form:

Fill out the Agriculture Gold Loan application form provided by the bank. Ensure that you provide accurate information and attach all required documents.

Valuation of Gold:

The bank will assess the purity and weight of the gold ornaments or jewellery you intend to pledge as collateral. The loan amount you are eligible for will be contingent upon this value.

Loan Approval:

Upon completion of the application processing and the valuation of the gold, the bank will proceed to assess your eligibility and grant approval for the loan, contingent upon your fulfilment of all established requirements.

Loan Disbursement:

After approval, the loan amount will be disbursed to your bank account. Depending on your preference and the bank’s policies, the bank may offer the loan as a Cash Credit or Demand Loan.

Repayment Plan:

Work with the bank to establish a suitable repayment plan. Agriculture Gold Loans typically have flexible repayment options tailored to agricultural cycles.

Loan Repayment:

Repay the loan per the agreed-upon schedule, including principal and interest payments. Timely repayment will ensure the smooth retrieval of your pledged gold.

Loan Closure:

Once you have repaid the loan, the bank will release your pledged gold ornaments or jewellery.

Document Retrieval:

Collect all original documents provided during the loan application process.

Review Loan Terms:

Before concluding the loan agreement, it is vital to thoroughly examine and assess all the stipulations and provisions, encompassing the interest rates, repayment plans, and any accompanying charges.

Maintain Communication:

Stay in regular communication with the bank and inform them of any changes in your circumstances that may affect loan repayment.

By adhering to the prescribed procedures and fostering effective contact with the selected lender, individuals can expedite the application process for the Agriculture Gold Loan and secure the necessary financial assistance for their agricultural endeavours.

Conclusion Points

Ultimately, agriculture gold loans are a good way for farmers and other people who work in agriculture to get money. Using gold as protection, these loans make it easy for farmers to get the money they need without selling their valuable assets.

Different lenders, like Kisan Agriculture Gold Loan and SBI Agriculture Gold Loan, may have different interest rates, which depend on things like the size of the loan, how long it will be paid back, and the borrower’s credit background.

Before making a choice, borrowers need to compare these interest rates to make sure they get the best deal possible. Agriculture gold loans can be a cost-effective way to get money for farming if you do your study and understand the terms and conditions. So, if you are a farmer or want to invest in the agricultural field, here are some things you should know.

FAQs

1. What is a Gold Loan for Agriculture?

Agriculture Gold Loan is a loan that farmers and other people who work in agriculture can get in exchange for gold jewellery or ornaments.

2. How does the interest rate for an Agriculture Gold Loan compare to other rates?

Different lenders may charge different interest rates on Agriculture Gold Loans. Before deciding on a bank or other financial company, comparing the interest rates they offer is a good idea.

3. What is a Gold Loan for Kisan Agriculture?

Kisan Agriculture Gold Loan is a type of loan for farmers used in agriculture. It lets them borrow money against their gold at good interest rates, which helps them pay for farming-related expenses.

4. What are the interest rates for a Kisan Agriculture Gold Loan?

Different lenders may charge different interest rates on Kisan Agriculture Gold Loans. Check with your bank or other financial institution of choice to see their current interest rates and terms.

5. Does SBI offer Gold Loans for Agriculture?

Yes, the State Bank of India (SBI) gives gold loans to qualified farmers. They offer low-interest rates, different ways to pay back loans, and fast processing of loan applications.

6. What are the interest rates for an SBI Agriculture Gold Loan?

Interest rates on SBI Agriculture Gold Loans can change based on the loan size, how long it is for, and how good the borrower’s credit is. For the most up-to-date information on SBI’s rates, visit their website or call the nearest store.

7. Can I use my farmland as security for a gold loan for farming?

No, gold trinkets or jewellery are usually the only things that can be put up as collateral for an agriculture gold loan. However, some lenders may have specific plans that allow agricultural land to be used as collateral. You should talk to individual banks or financial institutions to know more about this choice.

8. Is there anything I can’t do with the money I get from a farm gold loan?

Most of the time, there are no limits on using the money you get from a farm gold loan. You can use it for various farming costs, such as buying tools, seeds, and fertiliser. You can also use it for your own cash needs.

What Is Agriculture Gold Loan: Interest Rate Comparison