The Indian economy’s growth is highly dependent on the contribution of agriculture. Around 58% of the population in India earns their livelihood via agriculture and allied sectors. Moreover, approximately 70% of the rural population relies on agriculture to earn a source of living. The contribution of agriculture towards India’s Gross Domestic Product (GDP) is around 17%. Therefore, it becomes essential to boost the development of this sector.
Tractors play an integral role in farming and other agricultural activities. They help to improve productivity and reduce labor-intensive tasks. As a tractor is essential for agriculture, many financial institutions have recognized its importance, and are providing monetary assistance to farmers through tractor loans. Such loans are categorized under agricultural loans. An individual, a business entity, or a group of individuals can apply for this loan.
Just like a car loan, a tractor loan is a type of secured loan. Lenders like Mahindra Finance offer different tenure options ranging from three months to five years. In tractor finance, the borrower will have to pledge the tractor as collateral with the lender. If the borrower defaults on repaying the loan, the lender can take possession of the tractor and sell it eventually to recover the outstanding amount.
If you are planning to buy a tractor and are looking for funding, you need to submit a few tractor loan documents along with the application form to the financial institution. Some of these include:
- Identity proof
Financial institutions accept documents like copies of your Aadhaar card, PAN card, Voter ID card, passport, and driving license as identity proof. Besides this, they accept the duly attested photocopy of your bank passbook displaying your photo, address, and name as ID proof. The photocopy should be duly attested by your bank.
- Age proof
For age proof, you can submit a copy of your Aadhaar card, PAN card, or passport.
- Address proof
The purpose of this document is to ascertain whether you are an inhabitant of the village or not. Here, you can submit documents like your ration card, property card, electricity bill, and telephone bill copies.
- Income proof
You need to submit your income tax returns. Besides this, the lender may ask you to furnish a photocopy of your bank statements for the last one year as evidence of steady income.
Additionally, you need to share the tractor’s quotation copy duly signed and stamped by the dealer along with two recent photographs. A financial institution like Mahindra Finance also asks for the agriculture land ownership document. It offers economical tractor loan interest rates. You can log on to its website and learn more about the tractor loan eligibility criteria.