A new land loan from the State Bank of Australia is proving popular with buyers.

A $1.9 billion loan to be repaid in 10 years for the purchase of land in a marginal community in Western Australia has been met with enthusiasm from some local farmers, who have used it to pay off their debts.

Land loan sales have increased more than 50 per cent in the past year, as more borrowers turn to loans and more borrowers are choosing the State bank-backed model of the loan.

“This is one of the most widely used loans out there, and I think the majority of the borrowers are actually doing this out of a financial need rather than for a financial benefit,” said Simon Cairns, a land loan broker.

Mr CairNS says the loan has helped some farmers get back on their feet and get some of their debts paid off.

“Land loans are used for a variety of purposes,” he said.

“For example, you might be able to pay back a small debt that has been incurred or pay it off in a short period of time.

Or you might have a large debt that you’ve accumulated and you need to make some payments on.”

Land loan payments can also be made through the State’s Community Land Credit Scheme (CLCS).

In its submission to the Federal Government, CLCS said the loan was “the only viable method” for farmers who had outstanding debt that was not fully amortised and that it was “a very affordable option”.

“While CLCS loans can provide a relatively low interest rate, they are very restrictive,” the submission said.

Mr Glynne Cairn says his clients have used the loan to pay for their debt.

“I think the main thing that we’re trying to do with this loan is make sure that we are not spending it on debt that we’ve already accumulated, so that we can use it to get the money to make other things,” he told TechRadars ABC Rural podcast.

“The biggest benefit of this is that you can have an interest rate that is really competitive and not be taking up a lot of your credit.”

You can use that to make payments on a mortgage or for a loan and still get that money back for a period of 10 years.

“Mr Cavens said the CLCS loan was used to buy the property for $1,000 and then to pay down the loan and pay off the debt.

He said he used the money for other debts, including rent, and paid the rest in full over time.

Mr Clavin said the land loan was a “sustainable solution” for many borrowers, and there was no reason it shouldn’t be used for other purposes.”

It’s a loan that can be paid back for very low interest rates, so it’s not a lot to do, but it’s something that you could do and you wouldn’t need to worry about a lot,” he explained.”

So we can pay off a lot and still be able use that money for something else.

“Land lending is set to increase again in 2017, as lenders seek to tap into growing demand for the loan, particularly in rural and remote areas.

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