Farm Credit Loan Calculator
A farm credit loan is a specialized financing option designed for agricultural operations. These loans help farmers and ranchers purchase land, equipment, livestock, or cover operational expenses. Farm Credit is a nationwide network of borrower-owned lending institutions that provide credit and financial services to agricultural and rural customers. This calculator helps estimate the monthly payments, interest costs, and amortization schedule for farm credit loans.
- Farm Credit Loans: Designed specifically for agricultural operations including crop production, livestock, and farm real estate
- Equipment Financing: Used to purchase or finance farm equipment such as tractors, combines, and other agricultural machinery
- Operating Loans: Provide short-term financing for seed, fertilizer, feed, and other operational expenses
Farm Credit Loan: Paying Back a Fixed Amount Periodically
Use this calculator for basic calculations of farm credit loans, equipment financing, or operating loans, or click the links for more detail on each.
Equipment Financing: Paying Back a Lump Sum Due at Loan Maturity
Operating Loan: Predetermined Amount Due at Loan Maturity
Use this calculator to compute the initial value of an operating loan based on a predetermined face value to be paid back at loan maturity.
Farm Credit Loan: Fixed Amount Paid Periodically
Farm credit loans are designed specifically for agricultural operations. Routine payments are made on principal and interest until the loan reaches maturity (is entirely paid off). Some of the most familiar farm credit loans include real estate loans, equipment financing, and operating loans. Below are links to calculators related to loans that fall under this category, which can provide more information or allow specific calculations involving each type of loan.
| Farm Real Estate Calculator | Equipment Financing Calculator |
| Operating Loan Calculator | Livestock Loan Calculator |
| Crop Production Loan Calculator | Agricultural Loan Calculator |
Equipment Financing: Single Lump Sum Due at Loan Maturity
Equipment financing is commonly used in agricultural operations to purchase machinery such as tractors, combines, and other farm equipment. Unlike the first calculation, which is amortized with payments spread uniformly over their lifetimes, these loans have a single, large lump sum due at maturity. Some loans can also have smaller routine payments during their lifetimes, but this calculation only works for loans with a single payment of all principal and interest due at maturity.
Operating Loan: Predetermined Lump Sum Paid at Loan Maturity
Operating loans are short-term financing options used for seasonal agricultural expenses such as seed, fertilizer, fuel, and feed. These loans typically have a predetermined payment amount due at maturity. The face, or par value of an operating loan, is the amount paid by the borrower when the loan matures. Operating loans are typically structured as zero-coupon loans where borrowers receive funds at a discount to their face value, then pay the face value when the loan matures.
Farm Credit Basics for Borrowers
Interest Rate
Farm credit loan interest rates are typically competitive with other agricultural lenders. Interest rate is the percentage of a loan paid by borrowers to lenders. For most farm loans, interest is paid in addition to principal repayment. Farm loan interest is usually expressed in APR, or annual percentage rate, which includes both interest and fees.
Compounding Frequency
Compound interest is interest that is earned not only on the initial principal but also on accumulated interest from previous periods. Generally, the more frequently compounding occurs, the higher the total amount due on the loan. In most farm loans, compounding occurs monthly.
Loan Term
A farm loan term is the duration of the loan, given that required minimum payments are made each month. The term of the loan can affect the structure of the loan in many ways. Generally, the longer the term, the more interest will be accrued over time, raising the total cost of the loan for borrowers, but reducing the periodic payments.
Farm Credit Loans
There are several types of farm credit loans available to agricultural producers.
Farm Real Estate Loans
Farm real estate loans are used to purchase farmland, ranchland, or agricultural property. These loans typically feature longer terms (15-30 years) and lower interest rates than other types of farm loans because the real estate serves as collateral. Farm real estate loans generally have a higher chance of approval compared to other farm loans and can be a better option for those looking to purchase agricultural property.
Equipment Financing
Equipment financing is used to purchase farm machinery such as tractors, combines, planters, and other agricultural equipment. Because the equipment serves as collateral, these loans reduce the risk for lenders. Equipment financing typically features terms that match the useful life of the equipment being financed (3-10 years).
- Character—includes credit history, farming experience, and financial statements
- Capacity—measures a borrower's ability to repay a loan using farm income and expense projections
- Capital—refers to the borrower's net worth and equity in farm assets
- Collateral—property pledged as security for repayment of a loan
- Conditions—the current state of the agricultural industry and commodity prices
Equipment financing typically features competitive interest rates and terms that match the useful life of the equipment. Lenders may sometimes require a down payment (10-20%) for equipment financing.
If borrowers do not repay equipment loans, lenders may repossess the equipment. Equipment loans generally feature lower interest rates than unsecured farm loans because the equipment serves as collateral.
Examples of equipment financing include tractor loans, combine financing, and irrigation equipment loans.