All loans, no matter what they are, are either secured or unsecured.

Knowing the difference can better help you understand how they
work and what to expect when applying for one.
Secured Loans
A secured loan is one that relies on an asset, such as a home or car, as
collateral for the loan. In the event of loan default, the lender can take
possession of the asset (foreclose on a home or repossess a car, for
example) and sell it to recover the amount of money loaned. For this
reason, interest rates for secured loans are often lower than those for
unsecured loans.
In many cases, such as in the purchase of a home, the asset to be used
as the collateral will need to be appraised before the terms of the loan can
be set.
Examples of secured loans are:
� Car loans
� Boat (and other recreational vehicle) loans
� Mortgages
� Construction loans
� Home equity loans
� Home equity lines of credit
Unsecured Loans
Unsecured loans do not require the borrower to put forth an asset for
collateral. The lender relies solely on the borrower�s credit history and
income to qualify him for the loan. If the borrower defaults, the lender
usually has to try to collect the unpaid balance through a variety of efforts
which may include using collection agencies, freezing accounts, lawsuits,
and garnishing wages.
Because there is a considerably higher assumption of risk on the lender�s
part with an unsecured loan, the interest rate is usually much higher.
They are often more difficult to obtain and the amounts loaned are usually
lower than that for secured loans.
Examples of Unsecured Loans are:
� Personal loans
� Personal lines of credit
� Student loans
� Credit cards/department store cards
Payday Loans
Payday loans are relatively new on the loan scene. They are short-term
loans borrowed using the borrower�s next paycheck as guarantee for the
loan so, in a way, they are secured. However, payday loans have
notoriously high annual percentage rates (APRs) and can be difficult to
pay off. Banks do not generally offer Payday
loans. Most establishments offering them
are private companies with separate
storefronts.
Title Loans
A title loan, also fairly new, is a type of
secured loan where the borrower can use
their vehicle title as collateral. Borrowers
who get title loans must allow a lender to
place a lien on their car title, and temporarily surrender the hard copy of
their vehicle title, in exchange for a loan amount. When the loan is repaid,
the lien is removed and the car title is returned to its owner. If the
borrower defaults on their payments then the lender can repossess the
vehicle and sell it to repay the borrowers� outstanding debt. Typically, the
same companies that offer Payday loans will also offer title loans.
Agricultural Loans in India
Agriculture is the backbone of Indian economy and it definitely comes as no
surprise to see financial institutions offer monetary aid to farmers all across the
country. Agricultural loans are available for different kinds of farming-related
activities.

Types of Agricultural Loans in India

One can avail a loan for the following activities related to agriculture:

Running day to day operations

Buying farm machinery such as tractors, harvesters, et cetera
Purchasing land
Storage purposes
Product marketing loans
Expansion
Moreover, these financial aids can be offered in form of grants and subsidies too,
which are usually meant to protect the farmer in an event of crop damage or loss of
crops.

Agricultural loans in India are not only offered to farmers working towards the
cultivation of food crops, but they are available to anyone who is engaged in other
agriculture-related sectors like horticulture, aquaculture, animal husbandry, silk
farming, apiculture and floriculture.

National Bank for Agriculture and Rural Development (NABARD)

In India, all premier banking and financial organisations, at all levels, offer a
great deal of financial help to farmers. However, this trend of boosting the rural
economy and agriculture through financial credit was started by the National Bank
for Agriculture and Rural Development (NABARD) back in the early 1980s. When it
comes to credit in the field of agriculture, all other banks throughout the country
fall under the purview of the NABARD.

This financial institution is working in conjunction with the Government of India

to boost agriculture sector. It is credited with several innovative schemes that
have immensely aided the farmers throughout the country. The most notable scheme
launched by the NABARD is the Kisan Credit Card (KCC).

Kisan Credit Card Scheme

The Kisan Credit Card is a scheme launched by the Indian banks back in 1998, as a
way to fulfill the financial necessities of the agricultural sector. This is done
by giving monetary support to farmers, which in turn comes with various features
and benefits. The quantum of the loan depends on several factors like cost of
cultivation, farm maintenance cost, et cetera.

This has been particularly beneficial for those farmers who are not aware of the
banking practices. Moreover, it is meant to protect farmers from harsh and informal
creditors, which may land them in a massive debt.

The farmers can use the KCC card to withdraw funds for the purpose of crop
production and domestic requirements.

Applying for the KCC is a simple, hassle-free process that requires minimal
documentation. It also offers crop insurance coverage, along with subsidies on
interest payments. Speaking of interest, farmers applying for loans under the KCC
scheme can borrow funds at 7 percent per annum, for amounts up to Rs. 3 lakh.

The Kisan Credit Card is linked to the farmer�s savings account and all the
transactions are done under a single account. Additionally, any credit balance in
the KCC account earns interest. All farmers can apply for a KCC and if you are
looking to apply for one, then visit your nearest bank for more information.

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Other Similar Types of Agricultural Loan Schemes
The NABARD has also helped greatly in developing a couple of other schemes,
targeting specific sectors. A few of them are listed below:

Dairy Entrepreneurship Development Scheme: This scheme is meant to promote the

dairy sector, specifically by setting up modernized dairy farms, promoting calf
rearing, provide infrastructure, upgrading logistical operations to improve the
product on a commercial scale, and generate self-employment.
Rural Godowns: The main objective of this scheme is to help farmers throughout the
country by providing them with godowns. This will, in turn, improve their holding
capacity drastically and as a result, they will be able to sell their produce at
fair rates, rather than selling them under distress. In addition to this, with a
nationalised warehouse system in place, the marketing of agricultural produce
becomes simpler.
Loan Against Warehouse Receipts: Warehouse receipt financing serves as a foolproof
way to prevent distress sales. When a farmer needs funds, post-harvest, all he has
to do is store his produce in a Warehousing Development and Regulatory Authority
(WDRA) accredited warehouse, which in turn issues him a receipt. This warehouse
receipt mentions important details like quality and quantity of the produce, and
can be used to get credit from banks, up to 70 percent of the collateral value.
Solar Schemes: These schemes were implemented in order to reduce dependence on grid
power by promoting the use of solar equipment. The idea here is to replace diesel
pumps with solar ones, considering that they have low operating costs and are
environment-friendly.
The official website of NABARD can be visited for more details on these schemes,
along with the information on how to apply for them. Since many of these are
subsidy based schemes, your bank will adjust your loan repayments against the
corresponding subsidy you are entitled to, through the funds released by NABARD.

Leading Banks that offer Agricultural Loans in India

Coming to the public-sector banks in India, there are several leading financial
institutions who are known for their exceptional credit services in agriculture-
related sectors. Some of these banks are mentioned below.

State Bank of India Agricultural Loans

State Bank of India is a leader in financing projects in the agriculture sector.
They have helped millions of farmer across the country through their 16,000 plus
branches. They offer a variety of products like Kisan Credit Card, gold loan for
crop production and multi-purpose gold loan for agriculture activities.

SBI also offers agriculture loans for mechanisation of farms. The funds from these
loans can be used to purchase combine harvesters, tractors and install drip
irrigation. Moreover, loans for activities related to dairy, poultry or fisheries
can also be availed. Credit can be taken against warehouse receipts.

The bank also offers Debt Swapping Scheme, wherein financial aid is offered to
farmers to help them clear their dues that have been produced by taking loans from
non-institutional lenders like loan sharks, money lenders, et cetera. The main goal
of this scheme is to help farmers become debt free and clear their loans coupled
with atrocious interest rates.

Lastly, one can look to SBI for financial help if they are looking to boost their
agricultural marketing, establish agribusiness and agri clinic centres or purchase
land.

State Bank of India offers these loans and services through their parent branches,
as well as their seven associate subsidiaries - State Bank of Bikaner and Jaipur,
State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of
Travancore, State Bank of Indore and State Bank of Saurashtra.
If you are looking to avail any of these agricultural loans offered by the State
Bank of India, then all you have to do is visit your nearest SBI branch for more
details and application.

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HDFC Bank Agricultural Loans
The HDFC Bank offers a variety of agriculture loans for farmers and agriculturists.
The purpose of these loans varies across a broad spectrum, starting from
installation of orchards and plantations to promotion of commercial horticulture
and production of field crops. Furthermore, the HDFC bank also offers warehouse
receipt financing to all farmers and small traders.

Allahabad Bank Agricultural Loans

Allahabad Bank is another nationalised bank in India which offers the Kisan Credit
Card under its Akshay Krishi scheme. Needless to mention, the features of the plan
are the same as that of the KCC scheme. All farmers, tenant farmers, and cultivator
owners, et cetera.

In fact, Allahabad Bank has gone the extra mile to come up with its own version of
Kisan Credit Card. This one is known as the Allahabad Bank Potato Growers Credit
Card Scheme and its main objective is to provide sufficient financial support in a
timely manner to farmers, to help them meet their cultivation requirements.

Just like the State Bank of India, Allahabad Bank offers other services like
warehouse receipt financing, debt swapping scheme, construction of rural godown, et
cetera.

Bank of Baroda Agricultural Loans

Bank of Baroda is another leading name people look to when it comes to availing
loans for agricultural purposes. They have various schemes, covering almost all the
sectors in agriculture.

For instance, one can take loans to purchase tractors and heavy machinery needed
for day to day operations. Moreover, Bank of Baroda also offers working capital and
funds required for either setting up units, or running units occupied with dairy,
pig farms, poultry, sericulture, rearing of sheep and goat, et cetera.

Farmers can also look to the bank if they are in need of a four-wheeler to help
them manage their farm activities better. Bank of Baroda offers four-wheeler loans
with a maximum quantum of Rs. 15 lakh.

Punjab National Bank Agricultural Loans

Punjab National Bank has myriad financial products related to agriculture. For
example, one can avail loans from the PNB to establish biogas units, develop
wastelands, set-up minor irrigation apparatus, et cetera. In addition to this,
people who are interested in pursuing the field of apiculture (beekeeping) can
approach Punjab National Bank for financial support.

The bank also offers warehouse receipt financing, along with insurance coverage and
financial support to farmers in the event of crop failure, owing to natural
disasters, diseases, and pests. This scheme is known as Pradhan Mantri Fasal Bima
Yojana. All of this is in addition to the regular financial services offered to
farmers like Kisan Credit Card, debt swapping, et cetera.

ICICI Bank Agricultural Loans

The ICICI Bank offers a variety of agricultural loans. Their top selling product is
the Kisan Credit Card, which is a convenient way for farmers to meet their daily
requirements. They also offer long-term loans to purchase equipment or cattle,
which can be repaid over a period of 3-4 years.

The ICICI Bank also offers instant gold loans to meet financial requirements for
agriculture-related projects. In addition to this, they also offer the facility of
overdraft against Fixed Deposits, also known as Kisan Kalpvriksha. For more
information on these agricultural loans offered by the ICICI Bank, visit the
official website.

Axis Bank Agricultural Loans

Axis Bank has done well to earn a splendid reputation in the world of agricultural
finance. Over the years, they have greatly helped farmers through their diversified
financial products such as gold loans, Kisan Credit Card, tractor loans, warehouse
receipt financing, loans for developing rural godowns and many more.

Axis Bank also offers a product known as Contract Farming, wherein loan agreements
are made between farmers and corporates. The amount is provided by the lender
instantly for production and supply of the produce, and all of it is governed by
the Fair Practices Lending Code.

Before taking any kind of loan, it is recommended that you research carefully and
figure out the type of loan works best for you. Since a huge variety of
agricultural loans are offered, finding the one that fits suits your purpose is
absolutely crucial.