The U.S. Department of Agriculture (USDA) is announcing the launch of the Debt Consolidation Tool; an innovative online tool available through farmers.gov that allows agricultural producers to enter their farm operating debt and evaluate the potential savings that might be provided by obtaining a debt consolidation loan with USDA’s Farm Service Agency (FSA) or a local lender.
A debt consolidation loan is a new loan used to pay off other existing operating loans or lines of credit that might have unreasonable rates and terms. By combining multiple eligible debts into a single, larger loan, borrowers may obtain more favorable payment terms such as a lower interest rate or lower payments. Consolidating debt may also provide farmers and ranchers additional cash flow flexibilities.
The Debt Consolidation Tool is a significant addition to FSA’s suite of improvements designed to modernize its Farm Loan Programs. The tool enhances customer service and increases opportunities for farmers and ranchers to achieve financial viability by helping them identify potential savings that could be reinvested in their farming and ranching operations, retirement accounts, or college savings accounts.
Producers can access the Debt Consolidation Tool by visiting farmers.gov/debt-consolidation-tool. The tool is built to run on modern browsers including Chrome, Edge, Firefox, or the Safari browser. Producers do not need to create a farmers.gov account or access the authenticated customer portal to use the tool.
The FSA also recently announced significant changes to Farm Loan Programs through the Enhancing Program Access and Delivery for Farm Loans rule. These policy changes, to take effect September 25, 2024, are designed to better assist borrowers in making strategic investments in the enhancement or expansion of their agricultural operations.
In addition, the FSA has a significant initiative underway to streamline and automate the Farm Loan Program customer-facing business process. For the over 26,000 producers who submit a direct loan application annually, FSA has made several impactful improvements including:
- The Loan Assistance Tool: a resource that provides customers with an interactive online, step-by-step guide to identifying the direct loan products that may be a fit for their business needs and understanding the application process.
- The Online Loan Application: an interactive, guided application that is paperless and provides helpful features including an electronic signature option, the ability to attach supporting documents such as tax returns, complete a balance sheet, and build a farm operating plan.
- An online direct loan repayment feature that relieves borrowers from the necessity of calling, mailing, or visiting a local USDA Service Center to pay a loan installment.
- A simplified direct loan paper application, reduced from 29 pages to 13 pages.
- A new educational hub with farm loan resources and videos.
The USDA encourages producers to reach out to their local FSA farm loan staff to ensure they fully understand the wide range of loan and servicing options available to assist with starting, expanding, or maintaining their agricultural operations. To conduct business with FSA, contact your local USDA Service Center.
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