Mudra loans are offered by the Pradhan Mantri Mudra Yojana (PMMY). Micro-Units Development and Refinance Agency is referred to as Mudra. Under this program, borrowers may apply for business loans between Rs.50,000 and Rs.10 Lakh.
Mudra loan interest banks offered by various banks are mentioned in the table below:
| Bank Name | Interest Rates | Processing Charges |
|---|---|---|
|
One-Year MCLR + 2.75% |
Nil up to Rs.50,000; 0.35% of the loan amount + Taxes for Rs.50,000 to Rs.10 Lakh |
|
|
Starts at 8.85% p.a. |
Nil up to Rs.5Lakh; Rs.357 per Lakh for Rs.5 Lakh to Rs.10 Lakh |
|
|
EBLR + 1.75% for loans up to Rs.50,000; EBLR + 1.75% for loans above Rs.50,000 to R.2 Lakh, EBLR + 2.75% for loans above Rs.2 Lakh |
Nil |
|
|
RLLR + 0.35% onwards |
Nil for loan upto Rs. 5 Lakh; up to 0.50% for loans above Rs.5 Lakh |
|
|
Linked to MCLR |
Nil |
|
|
Please get in touch with the bank for more information |
||
|
Please get in touch with the bank for more information |
||
|
Linked to RBLR |
Please get in touch with the bank for more information |
|
|
Please get in touch with the bank for more information |
||
|
Linked to RLLR |
Please get in touch with the bank for more information |
|
|
Please get in touch with the bank for more information |
||
|
Linked to RLLR |
Please get in touch with the bank for more information |
|
Note: Rates are mentioned as of 24th May 2024 and can be revised by the bank without any notice. Please check with the bank before applying for a loan.
There are 3 types of Mudra loans and the loan amount offered depends on the type of the loan. Take a look at the following table for details:
| Type of loan | Loan Amount |
|---|---|
|
Shishu |
Up to Rs.50,000 |
|
Kishor |
Rs.50,000 to Rs.5 Lakh |
|
Tarun |
Rs.5 Lakh to Rs.10 Lakh |
Mudra loan interest rates are not fixed and vary based on individual cases. Here are some factors that may affect interest rates of Mudra loans -
Type of Business
Creditworthiness of Borrower
Age of Borrower
Quantum of Loan
Collateral Value
Loan Tenure
Current Government Policies
Market Condition
Lending Bank’s Policies
Now that you know what affects the interest rates when you apply for a Mudra loan, here are some tips to get loans at affordable rates -
Work on having a high credit score as it improves your creditworthiness and helps you get loans at more affordable interest rates.
Prepare a detailed business plan so that your credibility increases with the bank.
Select the correct Mudra category depending on your business needs, so you can get the right interest rate.
Choose a shorter repayment tenure, as that will mean you have to pay a lower interest rate.
Arrange for a bigger collateral to get a loan at a lower interest rate.
According to a 2018 analysis by The Economic Times, India had over 51 million MSME units that contributed to roughly 37% of the nation's GDP and 43% of its exports. Despite the important role that small firms play in economic growth, MSMEs have to deal with several difficulties, including a lack of funding for working capital and raw materials, obsolete technology, and a labor shortage.
The Pradhan Mantri Mudra Yojana was introduced by the government on April 8, 2015, to assist small enterprises with financial issues. Mudra provides business loans with payback tenures ranging from 1 to 5 years.
The amount of funding is determined by the type of loan that is available, and it is charged at the Pradhan Mantri Mudra Yojana interest rate that is currently in effect.
Mudra loans are unsecured because no collateral is necessary to obtain one. Because each organization determines its own risk factor and sets rates accordingly, interest rates differ from institution to institution.
A Mudra loan's processing period varies depending on the financier. The amount of time required for you to get the loan disbursement will depend on the financial institution you choose. Businesses can request an advance of up to Rs. 10 lakh without putting up any collateral by having the required paperwork on hand.
The application forms are available online at the Mudra website or from any of the intermediaries.
The initial category of Shishu Loans requires the completion and submission of a one-page application form. Applicants must complete a 3-page application form for the Kishor and Tarun loan categories.
The intermediary lending institution determines the terms and conditions of repayment in accordance with its rules while taking the business's cash flow into account.
Yes, the program has been running nationwide since April 8, 2015.
When the advance amount exceeds Rs. 2 lakh, an ITR, or income tax return, is one of the crucial documents needed to be eligible for a Mudra loan. A candidate will also require additional financial records, such as anticipated balance sheets for the next two years and balance sheets for the previous three years that have been audited by a CA.
Yes, Mudra loans are offered to new companies and startups. The commercial endeavors need only be related to the manufacturing, non-agricultural, or trading sectors. A prospective applicant must submit the business plan with the application form in order to be considered for the loan. Thus, it aids aspiring business owners in realizing their goals.
The Mudra loan program is government-funded, so having a high CIBIL score is not a necessity. As a result, both individuals and non-individuals who match the requirements of the scheme's eligibility requirements—which do not need applicants to have a minimum CIBIL score—can apply for this loan. However, having a good CIBIL score will help you negotiate better loan terms with lenders.
Thank you. Your feedback is important to us.
