Starting a business often requires a lot of money, but obtaining a loan can be challenging due to document requirements. To support business ventures in the country, the central government introduced the Pradhan Mantri Mudra Yojana. This scheme offers loans of up to Rs.10 lakh without the need for collateral. If you’re considering starting your own business, here are the details you need to know.
About Pradhan Mantri Mudra Yojana
This scheme was launched by the central government in 2015. It aims to provide loans ranging from Rs.50 thousand to Rs.10 lakh without requiring collateral. The best part is that there’s no processing fee for this loan. Eligible individuals can obtain this loan not only from public sector banks but also from cooperative banks, regional rural banks (RRBs), small finance banks, and NBFCs. The interest rate for this loan varies among different banks, usually ranging from 10 to 12 percent.
Three Types of Mudra Loans
Under PM Mudra, there are three types of loans to cater to different needs.
- Infant Loan: If you’re starting your business for the first time, the government can provide you with a loan of Rs. 50,000.
- Kishore Loan: For those already in business and looking to expand, you can borrow between Rs. 50,000 and Rs. 5 lakhs.
- Tarun Loan: If you have ambitious expansion plans, you can apply for loans ranging from Rs. 5 to Rs. 10 lakhs under this category.
How to Apply
To apply for this scheme, you must be an Indian citizen aged between 24 to 70 years. You’ll need essential documents such as Aadhaar, PAN Card, Passport, and Address Proof to complete the loan application. Visit the official website, download the application form, fill in all the required information, and submit it to your nearest public or private bank. The bank will review your documents and approve your loan application if everything is in order.