Updated: 4 October 2026
Canara Bank finances tractors under its Farm Machinery Loans scheme, which covers new and second-hand tractors, power tillers, trailers, combine harvesters and other farm implements. Repayment runs for 5 to 9 years in half-yearly or yearly instalments. The bank publishes the rate as a spread over its one year MCLR, not as a single figure.
A separate scheme, Canara Vehicle to Agriculturists, finances four-wheelers for agriculturists. Its page does not name tractors, so it is described separately below.
Interest rate
The bank's agriculture rate sheet, updated on 18.08.2026, has no separate line for tractors above 30 HP. It lists the scheme for small tractors (up to 30 HP) and the general agriculture term loan rates. The current MCLR value is not given in that document, so the final rate is not stated here.
| Sanctioned limit | Rate |
|---|---|
| Small tractors (up to 30 HP), up to ₹3 lakh | One year MCLR plus 1.55%, plus liquidity premium |
| Small tractors (up to 30 HP), above ₹3 lakh | One year MCLR plus 2.05%, plus liquidity premium |
| Agriculture term loans, above ₹3 lakh up to ₹1 crore | Spread of 2.30% over MCLR, plus liquidity premium |
For loans repayable beyond one year, a liquidity premium is added: 0.25% for more than 3 up to 5 years, 0.30% for more than 5 up to 7 years and more than 7 up to 10 years.
Who can borrow
| Tractor size | Minimum land |
|---|---|
| Up to 35 HP | 6 acres perennially irrigated or 12 acres dry |
| Above 35 HP | 8 acres perennially irrigated or 16 acres dry |
| Power tiller or trailer alone | 3 acres irrigated or 6 acres dry |
- Only tractors, power tillers and harvesters on the bank's approved list are financed.
- The horsepower must suit the soil, the cropping pattern and the size of holding.
- The page does not state an age limit or a repayment record rule.
Margin, security and tenure
- Margin: nil up to ₹2 lakh; 15% to 25% of the invoice above ₹2 lakh; 40% on a second-hand tractor.
- Security up to ₹2 lakh: hypothecation of the machinery bought.
- Security above ₹2 lakh: hypothecation plus mortgage of land worth at least the loan amount, or tangible security such as NSCs, KVP, the bank's FDs, LIC surrender value or appraised gold, valued equal to the loan.
- Repayment: 5 to 9 years in half-yearly or yearly instalments, depending on income. A moratorium is not mentioned.
Fees and prepayment
The Farm Machinery Loans page does not list processing fee, prepayment or foreclosure terms. For Canara Vehicle to Agriculturists, the processing fee is 0.25% of the loan, minimum ₹1,000 and maximum ₹5,000, plus GST. The bank has waived 100% of processing charges from 01.10.2026 to 31.12.2026 under its Retail Loan Festival. That page lists "no pre-payment penalty" as a benefit.
Canara Vehicle to Agriculturists
- For: new and pre-owned four-wheelers (LMVs) for agriculturists whose major income is from agriculture. Tractors are not named on the page, so ask the branch whether a tractor qualifies.
- Eligibility: more than 5 acres irrigated or 10 acres dry land, with 2 years of satisfactory dealing with the bank. Dairy, poultry, plantation and horticulture farmers need minimum gross annual income of ₹4 lakh instead.
- Amount: no upper limit, but not more than one year's annual income. Up to 90% finance on a new vehicle.
- Used: vehicle not more than 3 years old, 60% of appraised value, agreed price or original price, whichever is least, up to ₹50 lakh.
- Tenure: up to 84 months for new, up to 60 months for used. Repayment can be monthly, quarterly, half-yearly or yearly, as per the cropping cycle.
- Margin on a new vehicle up to ₹10 lakh: 10% for existing customers, 20% for new customers.
Rates are linked to RLLR, which was 8.00% from 12.03.2026, plus a spread by credit risk group. Rates for other borrowers (women borrowers get 0.05% less):
| Credit risk group (CRG) | Up to ₹15 lakh | Above ₹15 lakh |
|---|---|---|
| CRG-PRIME | 7.95% | 7.55% |
| CRG-1 | 8.05% | 7.65% |
| CRG-2 | 8.30% | 7.90% |
| CRG-3 | 8.70% | 8.30% |
| CRG-4 | 10.70% | 10.30% |
The concession stays the same until the loan completes 3 years from first disbursement.
Documents and how to apply
- Loan application with 2 passport size photographs of applicant, co-applicant or guarantor.
- KYC and proof of residence of applicant, co-applicant or guarantor.
- Agricultural income proof: ITR, or income certificate from Tahsildar, Revenue Officer or district authority. ITR is compulsory above ₹10 lakh.
- Quotation from an authorised dealer, and a valuation report for a used vehicle.
The documents above are listed for the vehicle scheme. The Farm Machinery Loans page lists none. Apply at a Canara Bank branch, or through the Apply Online tab on the vehicle scheme page. Customer care: 1800 1030.
Check before signing
- Ask which scheme the tractor will be sanctioned under and get the rate in writing as MCLR or RLLR plus spread, with the date from which it applies.
- Ask how often the rate resets and whether interest is on reducing balance.
- Ask for the processing fee, valuation charge and any insurance in rupees before signing.
- Check the repayment dates fall after harvest.
Use the EMI calculator for the monthly instalment and the on-road price tool for the amount to be financed. See tractor loans overview, tractor subsidy, tractor prices, tractor dealers and the Kisan Credit Card.
Sources
- Canara Bank, Farm Machinery Loans (purpose, eligibility, margin, security, repayment)
- Canara Bank, Rate of Interest for Agriculture and Allied Activities, updated 18.08.2026
- Canara Bank, Canara Vehicle to Agriculturists (four-wheeler loans for agriculturists)
- Canara Bank, Retail lending rates linked to RLLR (Canara Vehicle rows)