What is Mudra Loan?
Micro Units Development and Refinance Agency or commonly known as MUDRA loans is a scheme that is operated under the Pradhan Mantri MUDRA Yojana (PMMY). The Yojana is launched by the Government of India as an effort to help micro, small as well as the Medium scale enterprises. The main aim of the MUDRA loan scheme is to provide funds to the unfunded ones.
Under the MUDRA loan apply scheme, the micro, small and medium scale enterprises can get loans up to Rs 10 lacs for non-farm sectors, non-corporates, micro or small scale enterprises. How can we apply for MUDRA Loan Online? To avail these loans, the applicant can approach the lending institutions or can apply for it online. This form of loan can easily be availed by visiting small finance banks, commercial banks, Co-operative banks, NBFCs, MFIs and RRBs. Individuals can also fill up applications for MUDRA loan online by visiting their official site.
Types of MUDRA loans
There are three types of loans under the MUDRA scheme. Depending upon the pace of development of a startup plan along with the funds needed, you can avail loans based on the below-mentioned classifications.
Shishu Loans – An applicant can get up to Rs 50,000 as a loan, under this scheme. This is meant for people who require a small amount to start their businesses. It is generally given as the start of the business.
Kishor Loans – An applicant can get between Rs 50,000 to Rs 5 lac as a loan, under this scheme. The Kishor loan scheme is suitable for those who already have a business and they need funds to improve it. This scheme is launched for individuals
who have a business but it is not established well yet. The interest may vary from institutions to banks, from where you are applying for it. The credit of the applicant and business plan and its current position plays a great role in deciding the loan amount and rate of interest. The bank or the financial institution will decide the repayment period.
Tarun Loans – An applicant can get between Rs 5 lac to Rs 10 lac as a loan, under this scheme. This scheme offers the maximum loan to businesses under MUDRA Loans. This type of loan is given to individuals who have an established business but need funds to expand it. The business position, idea and credit history determines the repayment tenure, rate of interest and the loan amount.
Eligibility for MUDRA loan
People cannot avail MUDRA loans for personal purposes such as buying a house, bike, car, etc. You need to have a business idea to get a MUDRA loan. A business plan and a credit history report are must standards for MUDRA loan Eligibility. To get a loan, you must visit your nearest branch or fill up an application form for MUDRA loan online, on their official website. Additional documents such as ID proof, address proof, company ID proof, caste certificate, balance sheets, Tax returns, IT returns, etc. are also required to apply for Kishor and Tarun loan plans. Once, all documents are verified, you will be eligible for the loan.
How to get MUDRA loan?
Around 29 banks are listed under the scheme of MUDRA loans. As an applicant, you may visit the nearest branch of the mentioned banks to apply for MUDRA loans. Name of Banks – Allahabad Bank, Axis Bank, Andhra Bank, Bank Of Maharashtra, Bank Of
India, Bank Of Baroda, Central Bank Of India, Canara Bank, Corporation Bank, Federal Bank, Dena Bank, HDFC Bank, Indian Bank, IDBI Bank, ICICI Bank, Indian Overseas Bank, United Bank Of India, Union Bank Of India, UCO Bank, Tamilnad Mercantile Bank, Syndicate Bank, State Bank Of India, Saraswat Bank, Punjab National Bank, Punjab And Sind Bank, Oriental Bank Of Commerce, Kotak Mahindra Bank and Karnataka Bank.
Steps to get MUDRA loan
Interested candidates can visit any official website of the above-mentioned bank names to apply for MUDRA loans online. The online MUDRA loan process for applying is simple and quick. The official websites of banks whether rural, private or public sector bank provide the applicants with an online form. The applicants need to fill up that form be it, for Shishu, Kishor or Tarun Scheme. You just have to download and fill-up the form. The process is hassle-free and it avoids all sort of commotions such as waiting in line, visiting the concerned bank again and again.
The steps to apply for MUDRA loans online are as follows –
One – Download the application form for MUDRA loans from any official bank website;
Two – Fill up the form with correct information;
Three – Upload the required documents;
Four – Submit the form online;
Five – Once this loan process is carried out carefully, it will be sanctioned.
These documents are necessary to apply for MUDRA loans –
- Identity proof;
- Permanent address proof;
- Machinery and other required items quoted prices;
- Photographs (passport size);
- Business ID proof;
- Business registered address proof.
Generally, MUDRA loans are given for a period of five years and during this period the applicant has to re-pay the complete loan amount with the agreed amount of interest. The principal and interest amount are together distributed in the form EMIs so that the applicant can re-pay the loan in easy instalments. Thus, MUDRA loans help entrepreneurs in developing their business without adding much trouble in their day to day lives and finances.