Faqs - L&T Finance

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What are the different fees and charges associated with a farmer loan?

The farmer loan fees and charges include processing fees, interest rates, prepayment charges, foreclosure fees, EMI bounce charges, and legal fees. These vary based on loan type, lender, and borrower eligibility.

How much is the processing fee for a farmer loan?

The farmer loan processing fee in India typically ranges between 0.5% to 2% of the loan amount, depending on the lender and loan category.

What are prepayment and foreclosure charges for farmer loans?

Prepayment charges range from 0% to 4%, while foreclosure charges vary from 1% to 5% of the remaining loan amount. Some government-backed loans may have zero prepayment charges.

Are farmer loans subject to GST or other taxes?

Yes, GST applies to processing fees and other loan-related charges. Stamp duty and legal fees may also apply, depending on state regulations.

What are stamp duty and legal charges in farmer loans?

Stamp duty fees vary by state and are levied on loan agreements. Legal fees cover documentation, land valuation, and loan agreements applicable to loans against agricultural land fees.

What happens if I miss an EMI payment for a farmer loan?

Missing an EMI attracts late payment penalties (2% to 5% per month), and repeated defaults can impact the borrower’s credit score and future loan eligibility.

How can I reduce the fees and charges on my farmer loan?

Farmers can reduce costs by choosing government-subsidized loans, negotiating processing fees, making timely EMI payments, and selecting a lender with low charges.

What factors influence the fees and charges of a farmer loan?

Loan amount, tenure, lender policies, credit score, and government subsidies influence farmer loan fees and charges. Higher-risk borrowers may face increased costs.

Are there any upfront fees for applying for a farmer loan?

Yes, processing fees, stamp duty, and legal charges are paid upfront before loan approval. Some lenders may waive certain fees for eligible applicants.

What are the EMI bounce charges for farmer loans?

EMI bounce charges typically range from ₹500 to ₹1,500 per failed transaction, depending on the lender’s policies. Multiple bounces may lead to legal action.

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