Good news for common people. A lot of folks dream of launching their own business, but financial hurdles can get in the way. That’s where the Pradhan Mantri Mudra Loan Yojana (PMMY) comes in handy. It’s designed to support small business owners, shopkeepers, and budding entrepreneurs with financial assistance. You can get a loan of up to Rs 20 lakh without needing any collateral, and you have up to 5 years to pay it back.

 

Who’s eligible for a Mudra Loan?

If you’re looking to kick off a new venture or grow your current business, the Mudra Loan Yojana could be a great fit for you. Just make sure to put together a solid business plan before you apply. This will help banks or financial institutions assess your eligibility for the loan.

 

What types of Mudra Loans are available?

The government has set up three categories of Mudra loans, so you can choose one that fits your needs.

 

Shishu Loan

Loan amount: Up to Rs 50,000

Who it’s for: This is aimed at those looking to start a small-scale business.

Examples: Boutique, Grocery Store, Service Center, Online Startup, etc.

 

Kishore Loan

Loan amount: Rs 50,000 to Rs 5 lakh

Who it’s for: Ideal for those already running a business and looking to boost their capital.

Examples: Manufacturing units, service industry, trading businesses, etc.

 

Tarun Loan

Loan amount: Rs 5 lakh to Rs 20 lakh

Who it’s for: Tarun and Tarun+ loans are designed for significant business expansion. The Tarun loan offers Rs 5 to 10 lakh, and if you repay it, you can qualify for the Tarun+ loan, which provides Rs 10 to 20 lakh.

Examples: Medium-sized industries, franchise operations, hotels, and restaurants, etc.

 

Mudra Loan Interest Rate

The interest rate for a Mudra loan mainly depends on your credit score and the bank’s policies. If you lack a credit score, the bank will assess the risk to determine the interest rate.

 

Eligibility

You need an Aadhar card, PAN card, and a bank account. No collateral is required to secure the loan. You can approach public and private banks, NBFCs, and microfinance institutions.

 

How to Apply for a Mudra Loan

Head over to the official Mudra Loan website at http://www.mudra.org.in/.

Choose the loan category (Shishu, Kishor, Tarun) that fits your needs.

Download the application form, fill it out accurately, and attach all necessary documents.

Submit it at the nearest bank or microfinance branch.

The loan approval process typically wraps up within 15 days.