As one of the most important industries contributing to the Indian economy, the agricultural sector has witnessed fast-paced growth in recent years. This progress can be further accelerated by providing the required funds to the farmers and people engaged in agriculture-related activities.
A great way to gain access to a lump sum amount for this purpose is to apply for a gold loan, which caters to agricultural needs. The money obtained from such credits can be used to fund a range of agricultural activities. Here is a list explaining a few of them.
What Can You Do With an Agriculture Gold Loan?
How will you know whether this loan is the right option for your requirements? It is important to learn about the various scenarios where an Agriculture Gold Loan can be used.
- Crop Production
Right from getting sowing seeds to ploughing and harvesting, a lot of effort is involved in growing crops. Alongside, the hard work what is extremely important is the funds. To conduct these activities, you need to buy the seeds to sow and acquire the needed labour. You can use the amount gathered through an agriculture gold loan to fund these requirements.
- Equipment & Machinery
With advanced machinery, work that requires difficult manual labour and multiple hours of hard work can be completed easily. You need the right kind of equipment and machinery to get the job done. This is inclusive of expensive tractors, combine harvesters, ploughs, water bowsers and so on. These machines can be quite useful and equally expensive. Get an agriculture gold loan to finance the purchase of these high-tech equipment.
- Expand Farm Land
It is essential to keep expanding and cultivating as much land as possible to generate more income. To do so, buy more land and expand your farm with the help of an agriculture gold loan. You can borrow amounts high enough to purchase land if you have a sufficient amount of gold that meets the required purity standards.
- Allied Activities
You can use an agriculture gold loan to give allied activities like poultry farming, animal husbandry, fishing, and more, the needed boost. You can use the money obtained to fund requirements like animal feed, baits, fishing nets, and so on. Shearing costs and the expense of collecting and transporting animal produce can also be carried out with the help of this gold loan.
Why Should You Opt For an Agriculture Gold Loan?
Indian households tend to have a lot of gold in the house, which has been passed down over generations. Investments made in the form of buying new gold or applying for a gold deposit scheme are common practices. This asset can also help you enjoy its high value when mortgaged. This allows you to retain the precious metal and benefit from its surging market value. Here are some more benefits of getting an agriculture gold loan.
- High Loan Amount
Gold is a high-value asset. When you mortgage this valuable metal, you can borrow a huge lump sum. There is no set amount up to which you can borrow. If you have sufficient gold, you will be provided with the amount you need. However, it is essential to keep in mind that the money offered to you as a loan depends on the Loan-to-Value (LTV) ratio.
- Low Interest Rates
Gold loans are secured loans. As your gold is held as collateral, the lender is assured of repayment of the loaned amount in case of default. Hence, due to the lower risk associated with the loan, lenders offer such credit at lower interest rates, usually starting from 7% p.a. onwards.
- Easy Application
Applying for an agriculture gold loan has become very convenient in recent years. The availability of digital facilities for verifying and processing loan applications has made it easy to get such loans. Additionally, the documents required for an agriculture gold loan are quite minimal and can be scanned and submitted online. Hence, the process becomes much faster and quite hassle-free.
- Easy Eligibility
Agriculture gold loans come with easy eligibility criteria. Your gold collateral needs to meet the purity standards of 18 carats or above. The gold submitted should be in the form of jewellery or coins, as usually, bullions are not accepted by lenders. Besides this, you need to be an Indian citizen and over the age of 18. There are no strict requirements for credit score and income, however, if both of these are great, you are likely to get a loan on more favourable terms.
- Security
You are probably worried about the safety of your god when it comes to mortgaging it. When you submit your asset as collateral, it is transported and kept in secure bank vaults, which are under surveillance all the time. Some loan providers also provide insurance covers, which offer up to 100% compensation in the case of damage or theft of your gold.
- Flexible Repayment Schedule
Repaying a loan is not an easy task. You need to plan your budget in advance to make sure that the debt does not put a strain on your monthly finances. Thus, having control of your repayment schedule is a huge boon. You can choose to repay the borrowed amount in the form of EMIs or as a lump sum as per your monetary condition.
- Additional Facility
An agricultural gold loan also comes with a few added facilities. Some lenders provide you with the option to renew your loan. In addition to this, many lenders also allow you to get a part of the mortgaged gold back prior to the end of the loan tenure. This is known as a part-release facility, wherein you are required to repay the amount equivalent to the value of the portion of gold you wish to retrieve. Alongside this, you are also offered prepayment and foreclosure options to help you close your liabilities faster.
An agriculture gold loan can be a great way of upgrading your farming and allied activities. For a lower interest rate, borrow large amounts and fund your requirements with the help of this loan. Put the knowledge you received here to the test and get an agriculture gold loan right away!
