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A loan for purchasing agricultural land can help you invest in a valuable asset with can be useful for cultivation of crops or other activities. This secured loan is one of many types of land loans issued by all banks and NBFCs. However, there are a few rules and restrictions for getting this credit facility.  

It’s important that you do your research and choose the right type of land loan for your needs. Read on to know more about loans for agricultural land purchases.

Eligibility Criteria for a Loan for Agriculture Land

The eligibility criteria for a loan for agricultural land purchase differs based on your chosen lender. Here are some common requirements:

Documents Required to Apply for Loan for Agricultural Land Purchase

Requirements for this loan to buy agricultural land for salaried as well as self-employed applicants are similar, which are as follows: 

• Identification proof, including an Aadhaar card, voter ID and PAN card
• Address proof, including an Aadhaar card, passport, rental agreement and utility bills
• Income proof, including bank statements, salary slips and income tax returns
• Proof of land ownership 
• Record of agricultural land 

In addition, lenders may ask for other documents at the time of application for verification. Thus, its best to check the complete list on their website to save time and get quick loan approval. 

Characteristics of an Agricultural Land Loan

Here are some common features of an agricultural land purchase loan.

• Loan Amount

Such loans can range from a few lakhs to several crores.

• Interest Rate

Agriculture land purchase loan interest rates can be fixed or floating and vary depending on the lender, loan amount and tenure.

• Loan Tenure

It can range from a few months to several years, as per the lender’s policies.

• Collateral

This land is usually considered as collateral for the loan, but lenders also accept crops, livestock, or farm equipment.

• Repayment Options

You can enjoy flexible monthly or annual instalments, depending on the lender’s policies.

Process to Apply for a Loan to Buy Agricultural Land

Applying for it is similar to any other type of loan offered by the financial institution. Here are the steps for offline application. 

• Visit the lender’s physical branch
• Talk to a representative 
• Fill the application form 
• Submit the required documents

To apply online on the lender’s website, follow these steps: 

• Visit the lender’s website
• Fill the application 
• Submit the necessary documents

Know that these are general steps, but the particular process may vary from lender to lender.

Armed with this information, you can now plan your loan for buying agricultural land with ease. Remember, public sector banks often have agricultural land purchase schemes for small or marginal farmers that come with affordable terms. However, check the eligibility criteria carefully, as these may be stringent.

If you need funds for your personal needs, consider applying for a Fibe Instant Personal Loan for up to ₹5 lakhs with affordable interest rates. We offer a comfortable repayment tenure of up to 36 months with the option to foreclose the loan without penalties. Download our Personal Loan App or apply on our website today! 

FAQs on Loan for Agricultural Land Purchase

Can I get a personal loan to buy agricultural land?

An agricultural land purchase loan is usually a secured loan backed by the land as collateral. A personal loan is usually unsecured.

What is the interest rate on a loan to buy agricultural land?

The interest rate on a loan for agricultural land can vary depending on the lender, loan amount and repayment tenure. 

Can farmers get a personal loan?

Yes, farmers can get personal loans if they meet the lender’s eligibility criteria and have proper income documentation.

Are women eligible for agricultural loans?

Yes, women are eligible for agriculture loan for purchase of land. 

Is it possible to obtain an agricultural loan for upgrading farm equipment?

Yes, you can use this loan for any farming related expense, including buying equipment.  

What is the minimum collateral required for agricultural loans?

For loans up to ₹1.6 lakh, lenders don’t need collateral. For a loan amount above that, you need to pledge collateral at the lender’s discretion.

Where do you stand in the floating vs fixed interest rates debate? Confused about why this matters? Deciding between fixed and floating interest rates is crucial as it affects the amount you have to pay as EMIs. Choosing the right type of interest rate allows you to save more on interest payments. 

In any discussion about fixed interest vs floating interest rates, you first need to understand them. To understand the meaning and difference between fixed interest rates and floating interest rates, read further. 

What is a Floating Interest Rate?

This rate depends on a benchmark rate set by the lender. The EMIs towards your loan repayment will change accordingly. Simply put, it varies as per market fluctuations.

The lenders set a period after which they will revise the rate of interest on your loan. The lender can change these rates annually, half-yearly or quarterly. Note that the EMI amount that you pay monthly remains the same. The lender only alters the tenure according to the changing benchmark rate. 

Benefits of Floating Interest Rates

If you decide to go with these rates, you get to enjoy the following benefits:  

• Floating rates are generally lower than the fixed rates. So, you stand to save on your total cost of borrowing.
• If the lender makes a downward revision to the benchmark rate, you stand to gain from the reduced interest payments and shorter loan tenure. 

Drawbacks of Floating Interest Rates

There are also certain disadvantages to consider: 

• As the interest rate fluctuates according to market conditions, this lending option is considered unstable.
• In a low-inflationary market, the floating interest rates can remain high for a long time. This can burn a hole in your pocket.

What is a Fixed Interest Rate?

This interest rate is fixed at the time of your loan agreement and remains unchanged throughout your repayment duration. However, lenders generally peg it at 1%-2% higher than the prevailing benchmark rates. 

As opposed to floating interest rates, you can not avail yourself of reduced interest payments when the repo rate lowers. However, it provides a sense of certainty as your interest outgo also remains unchanged through the tenure. 

Benefits of Fixed Interest Rates

When you choose a loan with this rate, these are the benefits that you enjoy:

• Fixed interest rate offers predictability and certainty about the interest amount that you need to pay and the tenure you have for repayment
• Fixed interest rates become a more viable option when the repo rate is low
• This type of interest also allows you to calculate the overall cost of your borrowing with ease

Drawbacks of Fixed Interest Rates

Similar to floating interest rates, these rates have some drawbacks:

• As opposed to the floating interest rates, you do not benefit even if the repo rate lowers.
• A fixed interest rate is generally higher in comparison to floating interest rates.

Difference Between Fixed and Floating Interest Rates

Here are a few points of difference to consider when comparing floating vs fixed interest rates: 

At Fibe, you can get an Instant Personal Loan of up to ₹5 lakhs at fixed and competitive rates. You can pay off the loan early and become debt-free faster without any prepayment charges. Download our Personal Loan App from the App Store or Google Play or apply through our website to access easy credit. 

FAQs on Fixed vs Floating Interest Rates

Which is better among fixed vs floating interest rates?

It depends on your needs and preferences: 

• If you are looking for stability, a fixed interest rate is the perfect option for you
• If security is not your prime consideration, you can go with the floating interest rate

Do market conditions affect fixed and floating interest rates?

The RBI periodically revises the repo rate based on market conditions. While they affect the floating rates, they bear no effect on the fixed rates. 

Can I switch from a fixed interest rate to a floating interest rate?

Yes. Some lenders allow you to shift to floating rates after paying some EMIs.

How do the floating interest rates work?

Repo rates and floating interest rates are directly related. When the repo rate goes up, the floating interest rates also spike and vice versa. So, if the rates go up, the tenure may increase, and if they go down, the tenure may decrease.

Is a floating interest rate a good option?

Yes, it is an attractive option if you wish to save on interest payments. You may benefit if the lender lowers the benchmark rate.

Microfinance meaning, in simple words, indicates providing banking facilities to those who do not have access to traditional financial services. Financial services are an efficient way to help meet your personal goals. But how do these solutions impact the economy on a larger scale? Obviously by facilitating cash flow and liquidity in the market. 

That said, what happens when most of the population cannot access these services? As a result, growth gets stunted. One reason for the financial exclusion is the stringent eligibility requirements set by institutions. Due to these, individuals belonging to the low-income group are often left out. However, microfinance serves as a viable solution, promoting financial inclusion.

Read on to learn all about microfinance, its importance, benefits and more.

What is Microfinance?

Microfinance in India refers to the financial services made accessible to those who cannot access them through traditional institutions. Microfinance was traditionally made available through microfinance institutions (MFIs).

Microfinance companies in India operate similarly to banks, NBFCs and other financial institutions that offer services on a larger scale. The difference, however, lies in the fact that MFIs offer services catered to meet the requirements and financial capability of the low-income group.

A key eligibility requirement to avail of microfinance services is the income limit, which is set at ₹3 lakhs by the RBI. This is important because companies and institutions offering services to a larger group often have high-income requirements, thus making them inaccessible to the low-income group. 

People are increasingly borrowing from microfinance institutions due to the benefits it offers to individuals and the country. Banks and NBFCs have also started offering basic financial services to their customers after realising the needs that microfinance companies cater to. 

Types of Microfinance

A microfinance company is often differentiated based on the service it offers. Listed below are the basic financial services offered through microfinance:

• Microloans 

A collateral-free credit option that enables entrepreneurs to set up or expand a small business. When they repay on time, it also gives them a chance to avail of larger services from traditional institutions that require a good credit history.

• Microinsurance

Through this, individuals or small businesses ca access insurance coverage that protects them against unexpected expenses at a lower premium.

• Microsavings

By eliminating the minimum balance requirement, such services encourage them to invest at their convenience and earn returns, ultimately inculcating financial discipline.

Benefits of Microfinance

Here are some of the top benefits of microfinance that the underserved sections of population get to enjoy:

• Provides access to funding that often isn’t available through traditional institutions
• Offers opportunities for employment by allowing small business owners to grow
• Gives the group a chance to become self-sufficient and meet their goals
• Reduces financial stress and makes better opportunities accessible
• Access to flexible loan terms at affordable interest rates
• Loans available without providing any collateral as security

How Microfinancing Works in India?

Microfinancing in India works through the following channels:

SHG-Bank Linkage Programme (SBLP)

Launched by NABARD IN 1992, the SHG-Bank Linkage Programme encourages women belonging to the economically weaker sections to form groups of 10-15 members and contribute their savings regularly to the group. From these pooled savings, members of the group can avail of loans when needed. 

Microfinance Institutions (MFIs)

Microfinance Institutions (MFIs) are organisations that provide microfinance services like:

• Loans
• Bank accounts
• Insurance
• Remittances

These institutions get financial resources from lending institutions, which they use to provide affordable loans to the economically weaker sections. They work like Joint Liability Groups (JLGs), which are informal groups of 4-10 members. These JLGs can apply for loans as group members or individually. 

What are Microfinance Institutions?

Check out the various types of microfinance institutions:

Joint Liability Groups

Joint Liability Groups (JLGs) are informal groups with 4-10 members that seek loans based on mutual guarantee. Farmers, tenants and rural labourers are the main borrowers and loans associated with agriculture and similar businesses are the most common. 

Self-help Groups

Self-help Groups (SHGs) are groups with people belonging to similar economic groups seeking to financially support each other. The group members pool funds for a specific period to meet their business needs. 

NABARD’s SHG linkage program also allows various self-help organisations to borrow money from banks. To get the funds from banks, they need to provide a record of making payments regularly.

Grameen Bank Model

The Grameen Bank model was introduced by the Nobel Laureate, Prof. Muhammad Yunus, in the 1970s in Bangladesh. The main aim of this model is to boost and stabilise the rural economy. This model has also helped in the introduction of Regional Rural Banks (RRBs) in India to offer financial support to the economically weaker sections.

Rural Cooperatives

Rural cooperatives were started in India during the independence era. It included collecting assets from the financially weaker individuals and providing banking services to them. This system did not work as planned since it was more beneficial to creditworthy borrowers in rural India.

Microfinance in India is growing rapidly due to the emerging MFIs and financial institutions, which now offer financial services inclusively. Among the many banks, NBFCs and financial institutions promoting financially inclusive growth is Fibe. 

Through Fibe, you can get an Instant Personal Loan of up to ₹5 lakhs affordably. With easy-to-meet eligibility criteria and an alternate credit scoring model, Fibe aims to make loans accessible even to those who are new to credit. Download the Fibe Instant Loan App or log in to our website to apply digitally and get quick access to funds.

FAQs on Microfinance

How to apply for microfinance in India?

You need to visit the microfinance institution (MFI) of your choice to get microfinance. Then, connect with a representative to discuss your needs, fill out the necessary form and submit the required documents. Checking the process and requirements before applying is important since they differ across various financial institutions. 

What documents do I need to submit to avail of a microfinance loan?

The document requirements for a microfinance loan depend on the institution. Generally, you need to submit your ID, address and income proof with a filled application form. If you are getting a loan for your business, you will need to provide your business and financial documents as well.

How do I know if I am eligible for a microfinance loan?

Income is an important eligibility criterion for microfinance loans and the RBI has set the threshold at ₹3 lakhs. Microfinance institutions may also have other eligibility criteria. Therefore, checking the eligibility criteria of the particular institution is important to understand your eligibility for the loan.

What are the benefits of microfinance?

Some top benefits of microfinance include:

• Immediate access to funds
• Financing solutions for those excluded from traditional institutions
• Better financial growth on a personal and market level

What is the difference between a bank and a microfinance institution?

A key difference between a bank and a microfinance company in India is that a microfinance company provides services to people in the low-income group. On the contrary, a bank offers services to people belonging to all income groups.

There is no doubt that knowing how to check bank balance is important. It helps you track the receipt of funds, plan your budget and even help you understand if you need to get credit to fulfil your needs. Apart from actually visiting your bank, checking balance today is easier than ever. In this digital-first era, you can check bank balance online in seconds. 

Such methods are both quick and convenient as you can access your bank account information from the comfort of your home or on the go using just your smartphone or computer. Read on to know how to check bank balance in just a few clicks and save both time and effort. 

Steps to check bank balance

Access your bank’s net banking facility 

Logging in to your bank’s website is the most traditional way to check bank balance online. If you are new to using this service, you can register for net banking with ease. It takes just a few minutes to share the needed information and set up your login credentials. If you already have them in place, you can log in 24X7 to know your bank account balance. 

Use your bank’s mobile application 

Most banks today have dedicated apps that you can download on your phone, tablet or even a laptop. You can use the app to log in with your credentials and view your account balance in seconds. 

Send a text to know your balance 

The SMS or text message service is another way you can check your balance, especially if you do not have access to the internet. While not all banks offer the SMS service to check your balance, you can enjoy it with quite a few. You can make the most of this facility to check the amount in your account with top banks like SBI, Citi Bank and RBL Bank. 

Utilise a UPI app 

One of the fastest and easiest ways to check bank balance online is to use an app that has the United Payments Interface (UPI). Such UPI mobile applications include Google Pay, PhonePe and Paytm. Download these apps and register with your details. Then using the same mobile number that your bank account is registered with, you can use the OTP to add and link your bank account to the app. Once you complete the process, you can set a PIN and check your account balance anytime, anywhere! 

Leverage the missed call option 

Another way you can get your bank account balance is by placing a missed call to a specific number provided by your bank for this service. For this to work, ensure that your bank offers the facility and that you have registered your mobile number.

Another way you can get your balance is by calling your bank’s toll-free number or contact number and asking for it. This will require you to share your data or set up a specific PIN but also makes it easy for you to know your balance without having to go online. 

Keep in mind that most of these methods do require you to set up your login credentials and register your mobile number. So, ensure you keep these details secure. 

Now that you know how to check bank balance, you can use any of these ways to stay updated about your finances. If you fall short of funds to make a purchase or pay important bills, don’t stress. Simply take an instant loan from Fibe to access anywhere from ₹5,000 to ₹5 lacs in just 10 minutes! Download our Instant Loan app from Google Play or the App Store today and get funds with ease. 

FAQs on how to check bank balance 

How can a bank account balance be checked on a mobile phone? 

To check bank balance on a mobile phone, you can download your bank’s mobile banking app, log in using your internet banking credentials, and navigate to the ‘Account Summary’ or ‘Balance Inquiry’ section to view your bank balance. You can also send an SMS or give a missed call to your bank’s designated number to receive your bank balance via SMS. 

What is account balance and available balance? 

Account balance refers to the total amount of money in your bank account, including both the deposited funds and any pending transactions or holds. Available balance, on the other hand, is the amount of money that you can withdraw or use for transactions, excluding any pending transactions or holds. 

Can someone check my account balance? 

No, unless you share your internet banking credentials or provide access to your bank account, others cannot check your account balance. 

How can I see my bank statement online? 

To view your bank statement online, you can log in to your internet banking account or mobile banking app, navigate to the ‘Statements’ or ‘E-Statements’ section, and select the desired account and statement period. You can then view the statement online or download it in your preferred format. 

What number do I call to check my bank balance? 

Each bank has a designated number to check bank balances via phone call or SMS. You can find this number on your bank’s website, mobile banking app, or by contacting your bank’s customer service.