20 Lakh Government Loan for Business Without Guarantee! Here’s How to Get It

The central government or the state government has launched several schemes for the common man. However, if you are planning to do business, but are stuck due to financial constraints, then there is great news for you. Because, under the central government’s Pradhan Mantri Mudra Yojana scheme, loans of up to Rs 20 lakh are available now. That too without any guarantee or collateral. But to know who will get it and how to get it, read the report.

The loan amount has been doubled

Context, the Pradhan Mantri Mudra Yojana scheme was launched in 2015. And under this scheme, loans are given unconditionally to start non-corporate and non-agricultural businesses. Till April 2025, 52.37 crore loans have been disbursed through this scheme, worth more than Rs 33.65 lakh crore. And the interest rate on this government loan is 3.25% higher than the EBLR.

Earlier, loans of up to Rs 10 lakh were given under this scheme. However, considering its popularity, the government has increased both the limit and the category this time. After the announcement of the budget for the financial year 2024-25, the loan of this scheme has been doubled to Rs 20 lakh. That is, if you want to start a business, you can take a loan of up to Rs 20 lakh from the central government without any conditions.

However, loans are available in four stages under this scheme. Which include Shishu Loan, Kishore Loan, Tarun Loan and Tarun Plus Loan. In the case of Shishu Loan, you can get up to Rs 50,000, in the case of Kishore Loan, you can get a loan from Rs 50,000 to Rs 5 lakh, in the case of Tarun Loan, you can get a loan from Rs 5 lakh to Rs 10 lakh and in the case of Tarun Plus Loan, you can get a loan from Rs 10 lakh to Rs 10 lakh.

Main features of Pradhan Mantri Mudra Yojana

The main features of the Pradhan Mantri Mudra Yojana scheme launched by the central government are—

No guarantee or collateral is required to take a loan under this project.
The processing fee for this project loan is absolutely zero. That is, no additional money is required.
The interest rate of this project ranges from 9% to 15% per annum, which depends on the bank’s MCLR rate.
The loan of this scheme has to be repaid within three to seven years.
To apply for this scheme, you have to be an Indian citizen and be above 18 years of age. However, if the bank is bankrupt, the loan will not be available.
You should have a stable source of income and focus on business.

Who gives loans in this scheme?

According to several reports, commercial banks, regional rural banks and small finance banks provide loans on easy terms under the Pradhan Mantri Mudra Yojana. Also, some non-banking fintech companies or microfinance institutions provide loans up to Rs 20 lakh. This scheme is especially aimed at providing financial assistance to business startups.

How to apply and what documents are required?

Those who want to apply for the Pradhan Mantri Mudra Yojana scheme have to apply online by visiting the website https://www.mudra.org.in/. In that case, you have to fill the application form with all your personal information. Then if you are eligible for the loan, then you can go to the specific bank and collect the loan. But of course, you need to have Aadhaar card, PAN card, residence proof, passport size photo, income proof, business plan, KYC documents, etc. So if you want to become self-reliant by doing business, then apply for this scheme today and take your business a step forward by taking a loan.