The government introduced MUDRA loans under the Pradhan Mantri Mudra Yojana. Mudra is Micro Units Development and Refinance Agency. In this scheme, th
The government introduced MUDRA loans under the Pradhan Mantri Mudra Yojana. Mudra is Micro Units Development and Refinance Agency. In this scheme, the borrowers can take up business loans from Rs. 50,000 to Rs.10 lakh . Borrowers can get this loan under the category of Tarun, Kishor and Sishu. You can take up this loan without submitting any security or collateral if you want to start a new business or finance your existing business. Moreover, you can get repayment tenure from 12 months to nearly five years. The flexible EMI included in this loan term makes the mudra loan very famous.
Features of MUDRA loan
As mentioned earlier, there are three kinds of schemes under this loan. The mudra loan interest rate varies from one financial institution to another. Also, depending on your business requirement, you can get the loan amount. Every medium and small enterprise or business engaged in trading, manufacturing or service sectors can take up mudra loans.
In Tarun loans, any established enterprises or businesses can loan from Rs.500000 to Rs.10 lakh. In the Kishore loan, any business enterprise can take up this loan from Rs.50000 to Rs.500000 to purchase raw materials, equipment, or pieces of machinery. One can also utilise this loan for expanding the existing business. If you take up Shishu loans, you can get a loan of up to Rs.50000. Any new business or start-up can take up a Shishu loan.
How to apply for a mudra loan?
You need to first get the application form from the official website of mudra loan. Once you download the form, you need to fill in all the required details. You will find various banks with diverse application procedures. If you are confused with any steps, you should visit the nearest bank branch to get the loan. Once you submit the required application along with the documents, you can get the loan. You should remember to complete the bank formalities properly to get the loan without any hassle.
- Passport size photographs
- Bank statements of the last six months
- Can your proof and business address
- Special category certification
- KYC documents of co-applicants and applicants
- Driving licence, Aadhar card, voter card, passport and PAN card
- Any other documents by the bank
Benefits of taking mudra loan
Pradhan Mantri Mudra Yojana offers various benefits. Some of these are pointed below:
- These are majorly offered to retailers, traders, and medium and small enterprises engaged in service, trading and manufacturing sectors.
- It is covered under the government’s credit guarantee scheme.
- You can use the borrowed amount as a working capital loan, term loan or overdraft facility.
- People from scheduled caste or scheduled tribes categories can get the loan at concessional interest rates.
- The Mudra card that comes along with the loan helps the borrowers withdraw the amount according to the business requirements.
- You can withdraw the amount in portions or total.
Relevance of mudra card
It is a type of debit card that every borrower of mudra loan should have. It helps to meet the working capital requirements of the business. Moreover, the mudra loan extends a rebate of 25 basis points in the mudra loan interest rate. The maximum loan amount that any entrepreneur can get from a mudra loan is 10 lakh,
Small businesses have impacted a lot with the help of mudra loans. Especially during the coronavirus outbreak, it was difficult to pay the EMI. But with the provision of 2% interest, subvention could offer prompt payment. However, the mudra loan holds every small business and women entrepreneur.
Mahila Udyami scheme under mudra loan offers an interest rebate of up to 0.25 %. But you should make sure that you have availed the loan from any microfinance institution or non-banking financial sector.