PNB Tractor Loan: Interest Rate, Eligibility, Margin and Charges

PNB finances tractors under its Farm Mechanisation Scheme and Tractor Xpress, with 7 to 9 years to repay and up to 70% funding online.

Updated: 4 October 2026

Punjab National Bank (PNB) finances tractors through two routes. The Farm Mechanisation Scheme covers new tractors with matching implements, second-hand tractors, power tillers and repair of tractors, and the online Tractor Xpress product gives up to 70% of the tractor cost, up to ₹20 lakh, with no mortgage. Both ask for a minimum of 2.5 acres of land.

PNB's documents do not state a tractor-specific interest rate. The Bank's agriculture rate schedule lists "MCLR (1 Yr) + 1.25%" for agriculture loans up to ₹20 lakh, and it is not stated there whether tractor loans fall under that line. The facts below come from PNB's scheme document and web pages.

Products and who they are for

Product	Covers	Land condition
Farm Mechanisation Scheme (tractors)	New tractors and matching implements or equipment	Minimum 2.5 acres of perennially irrigated land, owned or on perpetual leasehold, or corresponding acreage
Farm Mechanisation Scheme (second-hand tractor)	Second-hand tractors with matching implements. The tractor should not be more than 5 years old.	Same as for tractors
Farm Mechanisation Scheme (power tiller)	New power tillers	Minimum 1.5 acres of perennially irrigated land, or corresponding acreage
Farm Mechanisation Scheme (repair)	Repair or renovation of a tractor more than 5 and not older than 12 years from date of manufacture	Not stated
Tractor Xpress	No-mortgage tractor finance to individuals and joint borrowers	Minimum 2.5 acres of agriculture land, land records mandatory

The scheme document says tractor finance is given after the economic viability of the proposal has been worked out. Farmers holding land jointly as a group can also apply.

Interest rate

The scheme document and the Tractor Xpress page do not mention a rate. The Interest Rates on Advances page lists, for agriculture advances excluding schematic lending:

Exposure	Rate as published
Agriculture loans up to ₹20 lakh	MCLR (1 Yr) + 1.25%
Above ₹20 lakh and up to ₹50 lakh	MCLR (1 Yr) + 2.00%
Above ₹50 lakh	Based on Internal Risk Rating and External Risk Rating

The same page shows PNB's one-year MCLR as 8.80% with effect from 01.10.2026, and the MCLR is revised from time to time. Whether a tractor loan is priced on this line or on another one is not stated. This page does not add the spread to the MCLR.

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Margin, loan amount and security

Farm Mechanisation Scheme: need based loan, net of margin. The margin percentage is not stated in the scheme document.
Second-hand tractor: up to ₹2 lakh.
Repair and renovation: up to ₹1,00,000.
Tractor Xpress: funding up to 70% of tractor cost and a maximum of ₹20 lakh.
Security: not stated in the scheme document. Tractor Xpress is described as no mortgage based tractor financing.

Tenure and repayment

Purpose	Repayment period
Tractors	7 to 9 years
Second-hand tractors	5 years
Power tillers	7 years
Repair or renovation of tractors	5 years
Tractor Xpress	Up to 7 years, including a 6 month moratorium if required

Under the Farm Mechanisation Scheme repayment is in half-yearly or yearly instalments, and the period is fixed case by case on the nature of the asset, category of farmer and repayment capacity. Tractor Xpress repays half-yearly.

Fees, insurance and prepayment

Processing fee: PNB's credit related service charges list nil up to ₹3 lakh and 0.30% above ₹3 lakh for agriculture credit schemes other than schematic lending, effective 15-04-2026. Whether the tractor schemes count as schematic is not stated. Expenses such as CIC, CERSAI and insurance are borne by the borrower.
Insurance: a borrower who opts for the PNB Farmers' Welfare Fund Scheme must insure the tractor and implements against third-party liability. The subscription is ₹800 for 12 months of a calendar year and ₹400 for less than 6 months.
Prepayment: PNB's charges page says no pre-payment charge is levied on floating rate loans to individuals, for business or other purposes. The 2% charge applies where a non-individual borrower prepays to shift to another bank. Whether a tractor loan is floating or fixed is not stated.

Documents and how to apply

A document checklist for the tractor loan is not published in the scheme document or on the Tractor Xpress page. Tractor Xpress needs land records. An existing PNB customer must have the mobile number linked to the bank account, and a new customer needs both Aadhaar and PAN. Tractor Xpress has Login with Aadhaar and Login with PAN Card options at tractorexpress.pnb.bank.in.

PNB also lists an Online Agriculture Loan Application at weblens.pnb.bank.in/lendperfect/home, and the loan can be taken through a branch. For loan products PNB lists the toll-free number 1800 180 8888, and 1800 1800 or 1800 2021 for grievances.

What to check before signing

Ask which rate line applies to the tractor loan, what the MCLR is on the sanction date and how often the rate resets.
Confirm that interest is charged on the reducing balance, not on the full loan for the full term.
Ask for the margin, security and the processing fee in rupees in writing, since these are not stated in the scheme document.
If the Farmers' Welfare Fund subscription or any insurance is added, ask whether it is part of the loan or paid separately.
Ask whether early closure carries any charge on that particular loan.

Try the EMI calculator and the on-road price tool, compare lenders on the tractor loan overview, and check tractor subsidy, tractor prices, tractor dealers and the Kisan Credit Card.

Sources

Tractor loan by lender

Axis Bank tractor loan Bank of Baroda tractor loan Canara Bank tractor loan Cholamandalam tractor loan HDFC Bank tractor loan ICICI Bank tractor loan Kotak tractor loan L&T Finance tractor loan SBI tractor loan

❓ Frequently Asked Questions

What is the interest rate on a PNB tractor loan? +

PNB's scheme document and Tractor Xpress page do not state a tractor-specific rate. The agriculture rate schedule (excluding schematic lending) lists MCLR (1 Yr) + 1.25% for loans up to ₹20 lakh, and PNB's one-year MCLR is 8.80% from 01.10.2026. Whether tractor loans use that line is not stated.

What land does PNB ask for? +

A minimum of 2.5 acres of perennially irrigated land, owned or on perpetual leasehold, or corresponding acreage, for a tractor. Power tillers need 1.5 acres. Tractor Xpress asks for 2.5 acres of agriculture land with land records.

How much does PNB finance and for how long? +

The Farm Mechanisation Scheme is need based, net of margin, with 7 to 9 years for tractors and 5 years for second-hand tractors. Tractor Xpress funds up to 70% of cost, up to ₹20 lakh, for up to 7 years including a 6 month moratorium if required.

Does PNB finance second-hand tractors? +

Yes, under the Farm Mechanisation Scheme. The tractor should not be more than 5 years old, the loan is up to ₹2 lakh and the repayment period is 5 years.

What is Tractor Xpress? +

PNB's online tractor finance with no mortgage, for individuals and joint borrowers. Login is with Aadhaar or PAN at tractorexpress.pnb.bank.in. Existing customers need the mobile number linked to the account, and new customers need Aadhaar and PAN.

What is the processing fee? +

PNB's charges page lists nil up to ₹3 lakh and 0.30% above ₹3 lakh for agriculture credit schemes other than schematic lending, effective 15-04-2026. Whether the tractor schemes count as schematic is not stated.

Is there a prepayment charge? +

PNB's charges page says no pre-payment charge is levied on floating rate loans to individuals. A 2% charge applies when a non-individual borrower prepays to move to another bank. Whether a tractor loan is floating or fixed is not stated.