PM MUDRA LOAN (PMMY) What You Need to Know in 2023 -bankinginfocheck

PM MUDRA Loan: What You Need to Know in 2023

Pradhan Mantri Mudra Loan(PMMY), also known as Micro Unit Development and Refinance Agency (MUDRA) Loan, is an Indian government scheme aimed at providing finance to small business owners and entrepreneurs. This loan was introduced by the Prime Minister of India in 2015 and has since become a popular financing option for many small business owners. In this blog post, we will provide you with an overview of Prime Minister Mudra Loan 2023, including its features, benefits, eligibility criteria and more.

What is PM MUDRA loan?

Pradhan Mantri Mudra Loan (PMMY) is a financial package offered by the Government of India to help small and medium businesses in India access credit and other financial services. The objective of PMMY is to provide affordable loans to micro-enterprises and support their growth.

Cash loans help small businesses, traders, entrepreneurs and self-employed professionals to access working capital finance for their operations. PMMY helps small businesses qualify for larger loans from banks and other lending institutions. PMMY was launched by the Government of India in 2015 with an initial outlay of Rs 20,000 crore and increased to Rs 3.1 lakh crore in 2020.

Under PMMY, borrowers can access credit up to Rs 10 lakh at affordable interest rates. PMMY is implemented through both public sector banks and microfinance institutions (MFIs). The loan tenure is usually 5 years, although it can be extended depending on the terms of the lender.

PMMY offers several benefits to borrowers such as easy access to credit, flexible repayment terms, no collateral security required, and reduced paperwork. This makes it an attractive option for small businesses looking to expand their operations without worrying about financial security.

Who is eligible for PM Mudra Loan?

Pradhan Mantri Mudra Loan is an Indian government initiative to help small businesses and budding entrepreneurs start, expand or improve their businesses. The loan is offered by various financial institutions such as banks, NBFCs, and micro-finance institutions (MFIs).

To be eligible for a PM Mudra loan, one must fulfill the following criteria:

• Must be an Indian citizen
• Have a business that is at least three years old
• Must have a bank account in any Indian bank
• Annual turnover Rs. 10 lakhs or more
• Sufficient collateral to secure the loan amount
• Not be registered as a defaulter with any Bank or financial institution.

Pradhan Mantri Mudra Loans are open to both salaried individuals as well as self-employed professionals. Those who have an existing business can apply for this loan if they want to expand their business.

What are the types of PM Mudra loans?

Pradhan Mantri Mudra Yojana (PMMY) provides three types of loans to Indian citizens: Shishu, Kishor and Tarun.

The Shishu loans are the most basic of the three. It offers a loan amount upto Rs 50,000. which can be used to finance small business operations or new ventures.

Kishor loans are for those who have already established their small business. It offers loan amounts starting from Rs 50,000 thousand to Rs. 5 lakhs and can be used to purchase new equipment or expand existing business.

The Tarun loan is for entrepreneurs who have been in business for at least two years and have made a profit. This loan offers loan amount starting from Rs 5 lakhs to Rs.10 lakhs and can be used to diversify or upgrade existing business operations.

All three types of PM Mudra loans come with competitive interest rates and flexible repayment terms, making them an attractive option for entrepreneurs looking to start or grow their businesses.

How do I apply for a Prime Ministerial Mudra Loan?

Applying for a PM Mudra loan is relatively easy. First, you need to fill a loan application form. You can find the application form at any Pradhan Mantri Mudra Loan Facility Center or download it from the official website. After that, you need to submit the filled form along with the required documents, such as proof of identity, address and income. Once your application is approved, the loan amount will be credited to your bank account.
The entire process usually takes 3-5 working days. In some cases, it may take longer depending on the amount of paperwork required by the lender. If you want to borrow a larger amount, you may need to provide additional documents.

Offers interest subsidization for those who have good credit history and have paid their loans on time. It helps reduce the debt burden and makes repayment easier. Additionally, borrowers can avail of additional incentives such as cash-back offers, discounted processing fees, and loan tenure of up to 5 years.

How much money can I borrow with a PM Mudra loan?

The Pradhan Mantri Mudra Loan Scheme provides working capital of up to Rs 10 lakh and term loan up to Rs 20 lakh to small businesses. The amount you can borrow depends on the purpose for which you are borrowing.

If you are borrowing for working capital, you may be eligible to borrow up to Rs 10 lakh. On the other hand, if you are taking a loan to set up a new business or to expand an existing one, you may be eligible for a loan of up to Rs 20 lakh.

The amount of loan you can take depends on your credit score, your repayment capacity, collateral, etc. The financial institution will assess your needs and determine the loan amount you can borrow. Once your application is approved, the lender will disburse the approved loan amount to you.

What is the tenure of a PM Mudra loan?

The tenor of a prime Mudra loan can vary depending on the type of loan and your financial needs. Generally, the loan tenure ranges from one year to five years. For term loans, you can choose a tenure of up to three years, while for overdrafts, the loan tenure can range from one year to five years. The tenure of a prime ministerial loan is also based on the repayment capacity of the borrower and the purpose for which the loan is taken. In any case, the maximum tenure of the Prime Minister's Mudra Loan is five years.

Apart from the general tenor, there are certain conditions attached to the Pradhan Mantri Mudra Loan Scheme. The interest rate will be determined by the lending institution and is based on the amount and loan you opt for. If you want to close your loan early, you may have to pay a prepayment penalty or prepayment charge.

It is important to note that your lender must notify you in writing of any changes in interest rates or other charges applicable during the term of your loan. You must read and understand all the terms and conditions related to your loan before signing any documents.

What are the repayment options for Prime Ministerial Mudra Loans?

Repayment options for PM Mudra loans are flexible and depend on the type of loan taken. For child loans, the repayment period is more than 5 years and for juvenile and youth loans, the repayment period is up to 5 years. All loans are subject to a maximum repayment period of 7 years.

Borrowers have the option of repaying their loan through monthly installments (EMIs) or lump sum payments at their convenience. Payment can be made through cash, cheque, demand draft, or Electronic Clearing Service (ECS). There is also the option of an automatic debit facility with direct debit instructions given to the lender's bank.

The borrower must regularly inform the lender of any change in personal information such as an address, contact number, etc., which may affect the loan repayment process. If the borrower fails to make payments on time, he may be charged a late payment fee as per the lender's policy.

Therefore, it is important for the borrower to read all the documents thoroughly and understand the terms and conditions related to the loan before availing of the Prime Minister Mudra Loan. The borrower must ensure that regular repayments are made as per the repayment schedule to avoid any penalties or fines.

How much margin money is required for a PM Mudra loan?

PM Mudra loans do not require any margin money for borrowers. This means that you can borrow the full amount of the loan without paying any additional money upfront. However, some lenders may charge a processing fee depending on the loan amount and your credit history.

Pradhan Mantri Mudra Loans are available to Small and Medium Enterprises (SMEs) and individual entrepreneurs. To be eligible for the loan, you must be an Indian citizen and have an active business in India. You must have a good credit score and have been in business for a minimum of two years.

Pradhan Mantri offers Mudra loans up to Rs 10 lakhs (Rs 1 million) to entrepreneurs and SMEs who need financing for their businesses. The loan tenure is flexible and can range from one year to five years. The interest rate on this loan is lower than other conventional loans, making it an attractive option for many borrowers.

When you apply for Pradhan Mantri Mudra Loan, the lender will assess your creditworthiness, the nature of your business, and the amount of collateral required for the loan. The lender may conduct a thorough background check on the borrower and the business before approving the loan. It is important to note that since no margin money is required, the borrower may have to provide additional security or collateral to approve the loan.

What are the processing fees for PM Mudra loans?

Yes, the processing fee is applicable for the PM Mudra loan. Processing fees generally range from 0.5 to 2.00% of the loan amount with a minimum of ₹500 and a maximum of ₹10,000 plus GST.

Depending on the lender and loan amount, processing fees may vary. The processing fee is deducted from the loan amount before disbursement.

It is important to note that the processing fee is non-refundable, so it is better to ensure that the borrower fulfills all the loan requirements and needs of the loan before applying for the loan.

Prime Minister Mudra Loans offer entrepreneurs a great way to get financial help for their businesses. However, it is important to understand all the fees and charges associated with the loan before applying for one. Processing fees are an important factor to consider as they can increase the overall cost of the loan.

What is the interest rate of a PM currency loan?

Pradhan Mantri Mudra Loan is a financial facility offered by the Government of India. It provides small business loans to borrowers who meet certain criteria. The interest rate on this loan will vary depending on the type of loan taken. For child loans, the interest rate is 7% per annum. For juvenile loans and young loans, the interest rate ranges from 8-9% per annum. The government is their borrower

Are there any prepayment charges for Prime Minister Mudra Loans?

There are no prepayment charges for Prime Minister Mudra Loans. Borrowers are allowed to prepay their loans without any penalty or charge. This means that if a borrower wishes to pay off their loan amount before the due date, they can do so without incurring any additional costs. However, it is important to check with the lending institution for any specific terms and conditions related to prepayment.

Banks offer Prime Minister Mudra Loans:

Government Banks: To get a currency loan, the preferred government. Banks are - SBI (State Bank of India), BOB (Bank of Baroda), BOI (Bank of India), BOM (Bank of Maharashtra), CB (Canara Bank), CB (Corporation Bank), CBOI (Central Bank), etc
Private Banks: Preferred private banks for getting currency loans are: Axis Bank, Catholic Syria Bank, DCB Bank, HDFC Bank, City Union Bank, Federal Bank, etc.

Except the above banks some of MFI companies are also providing the PM MUDRA LOAN.

YOU CAN APPLY FOR MUDRA LOAN ONLINE

Conclusion

Pradhan Mantri Mudra Loan is a beneficial loan scheme for micro and micro-enterprises. It provides financial assistance without collateral and offers flexible repayment options. The loan application process is simple, and the loan is disbursed quickly. In 2023, this loan scheme can help many small businesses to start or grow their business.

FAQs

1. Who is Eligible for PM Mudra Loan in 2023?
• Individuals aged 18 years and above who are engaged in small and micro-enterprises are eligible for this loan scheme.

2. What is the loan amount under the PM Mudra loan?
• Loan amount starting from Rs. 50,000 to Rs 10 lakh, depending on the type of loan and the creditworthiness of the borrower.

3. Are Prime Minister Mudra Loans collateral-free?
• Yes, the loans under this scheme are collateral-free, which means that the borrower is not required to provide any security or guarantee.

4. How can I apply for a PM Mudra loan?
• To apply for this loan scheme, visit the nearest branch of a participating financial institution and submit the required documents

5. What is the repayment period of the PM Mudra loan?
• The borrower can choose from various repayment options including monthly, quarterly, half-yearly or annual installments. The repayment period varies between 3 to 5 years depending on the loan amount and the borrower's creditworthiness.

It is important to remember that you will be expected to make regular repayments towards the loan as per the agreed terms when you apply. Make sure you read the contract carefully before signing.