This is probably the area of greatest differentiation when you compare Farm Credit to banks or other lenders. Generally, we offer the most competitive interest rates you'll find anywhere in the market. Combined with variety in interest rate product options, our loans are designed so that you'll be comfortable with the interest rate risk you choose.
With interest rates low for the past few years, folks often don't recall or realize what can happen to their loan payment in a rising interest rate environment.
We help you manage interest rate risk with VARIABLE, ADJUSTABLE and FIXED-RATE options.
Variable - Our variable interest rate option puts YOU in control. The variable rate will generally be lower than other interest rate options; however, if rates are increasing we give you the flexibility to convert your loan to an adjustable or fixed interest rate at any point during the life of the loan.
Adjustable - Many lenders offer adjustable rates for a specific term or maturity of the loan. At the end of the term, you often have to renegotiate or renew your loan. At Farm Credit, you can choose an adjustable rate option that allows you to manage your own interest rate risk. We'll set up your loan term or amortization based on your needs or the useful life of the asset being financed.
You can choose to lock in an adjustable rate for a specific term from 1 - 15 years depending on the type of loan. The term or amortization of the loan is always the same, but you choose the adjustable rate period, for example three years. At the end of the three-year period, your rate automatically rolls to another three-year pricing at whatever the three-year interest rate is at that time. Again, you have the option of converting to another rate or product anytime during the life of the loan.
Fixed - If you want peace of mind from interest rate risk, then Farm Credit is the place to be. We offer fixed interest rates on real estate for terms from 5- 30 years. You never have to worry about your interest rate changing, unless you want it to! You are locked in for the life, or term, of the loan.
If your bank is offering a fixed rate for a farm or land loan, i.e. 15, 20 or even 30 years, chances are they originated your loan and then sold the loan to the secondary market, i.e. Farmer Mac. Generally, you're given no flexibility in regard to loan servicing, payment adjustments, pre-payments, interest rate conversions, or other service needs.
This never happens at Farm Credit! All Farm Credit loans remain with Farm Credit, in western Arkansas. The local folks who closed your loan will be the same folks who take care of your loan needs for the life of your loan! That's personal service you can count on!