Everything that you need to know about MUDRA bank loan – FAQ
- What is a MUDRA loan?
MUDRA loan or the Pradhan Mantri MUDRA Yojana is a Central Government flagship launched to generate business and income in India. MUDRA loan helps the micro and small-scale units to set up their business by providing funds up to a maximum of Rs: 10 lakhs.
- Who are all eligible for the MUDRA bank loan?
Any Indian citizen who has valid documents to prove their identity and address can apply for MUDRA loan provided the funds required for their source of working capital does not exceed ₹10 lakhs.
- What are the necessary documents for applying the PM MUDRA loan scheme?
Income proof, photo identity proof, address proof, bank statement of the last 6 months or 1 year (depending on the amount required), 2 recent passport size photos, MUDRA application form, and a loan application form. Don't use plagiarised sources.Get your custom essay just from $11/page
- How does the Pradhan Mantri MUDRA Yojana scheme work?
There are 3 types of loan facilities provided under the PMMY scheme – Shishu, Kishor, and Tarun. Shishu scheme provides loan amount not exceeding ₹50, 000. The maximum amount of sanctioned loan in Kishor is ₹5 lakhs. While the Tarun scheme provides credit up to a maximum of ₹10 lakhs.
- What are Shishu, Kishor, and Tarun loan schemes?
Shishu is the primary loan facility provided under the MUDRA Yojana, where the entrepreneur will get money for purchasing machinery. The amount here is reduced to ₹50, 000. Kishor scheme is intended for those business people who are looking for further expansion or renovation of an existing shop. While the Tarun loan plan helps in providing funds for new growth or diversification in their business.
- What type of companies can avail MUDRA bank loan?
All non-corporate companies, all manufacturing, trading, or service companies which are engaged in a small-scale run and any business owner or company whose credit requirement is for a maximum of Rs.10 lakhs or lower.
- What is the interest rate for the MUDRA loan?
As per the RBI guidelines, the banks charge interest rates based on the amount required. The interest rate may vary between banks. But in general, the rate ranges from 8.40% to 11.20%.
- Who can all get benefits from the MUDRA loan?
Any small scale-run business enterprise or individual can get benefit from the MUDRA loan. If you are a shopkeeper, fruits/vegetable vendor, farmer, women entrepreneur, Khadi worker, you can apply for a MUDRA loan. PMMY loan provides funds for micro-businesses like printing, medical shops, saloons, boutiques, dry cleaning, beauty parlors, mechanic shops, repair shops, courier facilities, ice-cream making units, pappad making, achar making, women-run food manufacturing companies, catering services, etc.
- What is the repayment time of the PM MUDRA loan?
The repayment period of the MUDRA scheme can be extended up to 7 years.
- Is there any collateral security for the MUDRA loan?
One of the key features of the MUDRA loan is that borrowers need not produce any collateral security. Besides, there are zero processing charges on the MUDRA loan.
- Is there any discount for women borrowers?
There are discounts for women entrepreneurs. They can avail the loan at discounted interest rates.
Keywords used: MUDRA loan, Pradhan Mantri MUDRA loan, MUDRA loan scheme, MUDRA bank loan.