The FSA offers a variety of loan programs, both to experienced farmers and to those who are just getting started. Throughout the year, the FSA continually updates the interest rates for its loans to adjust with current economic conditions.

If you’re interested in securing a farmland loan, your first step should be to research and understand current interest rates. These determine how much you must repay to your lender each month.

This article will walk you through current interest rates and how you can secure a farmland loan.

 FSA Loan Interest Rates for 2020

Loan interest rates tend to fluctuate from one month to the next. In some cases, they’ll experience a sudden major spike or decrease, but more often they undergo smaller, steadier changes. That said, you can also secure a fixed rate loan, which means your loan’s interest rate will remain the same.

Having said that, here are the most up-to-date FSA loan interest rates for August 2020:

  •     Farm Operating – Direct: 1.375%
  •     Farm Operating – Microloan: 1.375%
  •     Farm Ownership – Direct: 2.375%
  •     Farm Ownership – Microloan: 2.375%
  •     Farm Ownership – Direct, Joint Financing: 2.500%
  •     Farm Ownership – Down Payment: 1.500%
  •     Emergency Loan – Amount of Actual Loss: 2.375%

How Loan Repayment Works

Keep in mind that the monthly amount you’re required to pay also depends on the principal and the period:

  •     The principal is the original total loan amount.
  •     The period is the number of years that you’re given to repay the loan (plus interest).

For example, let’s imagine that you receive the following loan:

  •     Principal: $50,000
  •     Interest rate: 2.375%
  •     Period: 15 years

In this case, you’d be required to pay $330.46 each month in order to repay your loan on-time and in-full. (You can use this handy calculator tool to explore additional monthly loan payment amounts.)

Start Searching for Farmland Loans Today

When it comes to searching for a loan, it’s important to remember that you have a variety of options. If one loan’s interest rate and period doesn’t suit your budget, you can always move on to the next one!

 As you navigate this process, it can be helpful to work with a professional lending company. Here at MSF Agriculture, we’ll help you locate the loan program that’s ideally suited to your business’ goals and constraints. Contact our office today to speak with an expert and start looking for farmland loans!