What are the interest rates for dairy farm loans?

When applying for dairy farm loans, interest rates are a key consideration for applicants. Here is an overview of how interest rates typically work:

• Starting Rates: Interest rates for dairy farm loans generally start at 7% per annum or more. Actual rates vary across financial institutions depending on specific policies.
• Type of Loan: Secured loans usually have marginally lower interest rates compared to unsecured loans, as collateral partially offsets the risk.
• Loan Amount: Larger loan amounts may attract different interest slab rates based on an assessment of repayment ability.
• Applicant Profile: A good credit score and financial discipline may enable the applicant to avail better interest rates from lending institutions.
• Institution Policies: Public banks, private banks, Non-banking Financial Companies (NBFCs) and cooperatives may offer varying interest rates based on internal guidelines.
• Government Schemes: Subsidised interest rates under state or central schemes, wherever applicable, can typically reduce effective interest costs for eligible dairy farmers.
• Tenure: Short-term loan rates are often lower than long-term loan rates because lenders face less risk over a shorter period

Before finalising any dairy loan, applicants should compare interest rates, charges, and loan conditions offered by multiple institutions to make an informed decision based on their specific requirements and repayment capacity.