Uttar Bihar Gramin Bank Tractor, Harvester Loan for Agriculture purpose

If you’re ready to mechanize your farm and lift productivity with a tractor, harvester, or allied implements, the Uttar Bihar Gramin Bank (UBGB) Tractor & Harvester Loan gives you a clean, farmer-first path to ownership. The product is purpose-built for cultivators who want reliable machines, steady cash flow, and a repayment schedule that follows the rhythm of cropping seasons—without complicated jargon.

What this loan is for (in plain words)

A Term Loan to purchase agricultural machinery—primarily tractors and harvesters—plus essential attachments that directly support field preparation, sowing, irrigation, and harvesting. The goal is simple: reduce labor bottlenecks, complete operations on time, and improve yields and income per acre.

Who can apply (Eligibility)

UBGB designed this for serious cultivators with land and experience:

• Individuals or partnership firms engaged in agriculture or allied activities, owning their land.
• Permanent residents within the bank’s command area.
• Landholding: at least 4 acres irrigated and 8 acres unirrigated (a mix also works if it meets the bank’s norms).
• Experience: at least 1,000 hours of hiring experience (i.e., running/operating machinery for hire or farm work).
• Clean track record: no defaults with any bank/NBFC.

Why land and experience matter: the bank wants to ensure the machine will be used productively and safely, season after season.

How much the bank finances (Loan eligibility & margin)

• Loan eligibility: up to 80% of the machine’s total cost.
• Your margin: 20% (your own contribution).
• Disbursement: paid directly to the dealer/supplier by cheque/draft for transparency and quick delivery.

Example: If your tractor + implements on-road cost is ₹10 lakh, UBGB may finance up to ₹8 lakh (80%) while you bring ₹2 lakh (20%) as margin.

Pricing & costs (Interest, insurance, charges)

• Interest rate: 12.5% p.a., compounded half-yearly (subject to change as per bank policy).
• Insurance: Comprehensive insurance with bank clause is mandatory, covering the machine for the purchase amount; consider add-ons (zero-dep, roadside assistance) if your terrain/routes demand it.
• Other charges: The branch will share applicable processing or documentation charges upfront.

Why compounding is mentioned: the bank computes interest at half-yearly rests, even though your repayments may be quarterly/half-yearly—your sanction letter will show the exact schedule.

Moratorium, tenure, and repayment

• Moratorium: up to 6 months within the overall tenure—useful for registration, initial learning curve, and completing a cropping cycle before full installments begin.
• Tenure: up to 9 years (including moratorium).
• Repayment frequency: quarterly or half-yearly installments—aligning with crop cash flows (harvest/market sale windows).

Tip: If you sell produce twice a year, half-yearly installments can feel easier; if you have multiple shorter crops, quarterly may fit better.

Security (what you pledge)

• Primary security: Hypothecation of the financed tractor/harvester and implements (the bank’s charge is noted on the RC).
• Collateral security: Mortgage of land as per policy—your branch will guide you on acreage/value needed for your ticket size.
• Operational note: One key and a copy of the RC (with bank clause) are kept in branch custody for security.

KYC & basic documentation

• KYC mandatory: PAN (or Form 60/61), valid photo ID, address proof, recent photographs.
• Land papers: clear title/records and irrigation proof (where relevant).
• Proof of experience: documents or references supporting 1,000 hours of hiring/operation.
• Dealer proforma invoice with on-road price breakdown (machine, implements, RTO, insurance).
• Any existing loan details and bank statements if requested.

Neat, complete documents equal faster appraisal and disbursal.

How the process works (step-by-step)

1. Collect a dealer quote: Get the proforma invoice for the tractor/harvester and the implements you truly need (don’t over-accessorize day one).
2. Visit your UBGB branch: Share landholding details, irrigation status, and brief notes on how you’ll deploy the machine (own farm + hiring hours).
3. Sanction: The bank assesses cost, margin, experience, and security; confirms up to 80% finance and the interest/tenure.
4. Documentation & hypothecation: Complete mortgage and KYC; arrange comprehensive insurance with bank clause.
5. Disbursement to dealer: The bank pays the supplier; you take delivery, register the vehicle with bank endorsement, and start work.
6. Repayment: After moratorium (if availed), pay quarterly or half-yearly as per sanction—ideally right after crop sales.

Practical tips to keep EMIs comfortable

• Match capacity to acreage: Buy horsepower and implements aligned to soil type and typical workload; oversizing increases fuel and maintenance without proportional gains.
• Plan utilization beyond your field: Even 200–300 paid hiring hours per season can substantially offset EMIs—line up neighboring farmers early.
• Service on schedule: Stick to manufacturer intervals; fresh oil, filters, and greasing prevent costly breakdowns during sowing/harvest peaks.
• Protect tyres & drivetrain: Proper inflation and balanced loads reduce wear; poor tyre care is a silent profit killer.
• Fuel discipline: Maintain a logbook; small leakages/pilferage add up over harvest season.
• Choose repayment wisely: If your main income comes once or twice a year, half-yearly installments reduce stress; consider part-prepayment after good seasons to cut total interest.

What success looks like (cash-flow thinking)

• Before sanction: Estimate conservative hiring rates and hours (don’t assume best-case).
• Know your window: Sowing and harvesting are time-critical—mechanization pays because it protects yield timing.
• Buffer for off-season: Keep a two-installment reserve from peak-season earnings; it’s the simplest insurance against weather surprises.

Quick answers (straight to the point)

Is this only for owners of agricultural land?
Yes—this scheme requires land ownership (with minimum 4 acres irrigated and 8 acres unirrigated as per norms).

What if I’m new to machinery?
The bank asks for 1,000 hours of hiring experience; if you’re short, consider practical training or partnering with an experienced operator.

Who receives the money?
UBGB disburses directly to the dealer/supplier.

How long can I repay?
Up to 9 years, with a 6-month moratorium included, and quarterly/half-yearly installments thereafter.

Is collateral mandatory?
Yes—land mortgage is required in addition to hypothecation of the machine.

Can I insure later?
Insurance is mandatory at purchase (with bank clause) and must be kept current.

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Bottom line: UBGB’s Tractor & Harvester Loan for Agriculture is a farmer-first way to own the right machine with the right structure—80% finance, 20% margin, 12.5% (half-yearly compounding), up to 9 years with season-friendly repayments, transparent dealer disbursal, and strong risk cover via insurance + land mortgage. Bring your land papers, dealer quote, and KYC to the nearest UBGB branch—and put timely operations, higher efficiency, and steadier farm income within reach this season.