Friends, Are you an aspiring entrepreneur in search of the perfect loan to finance your business? Look no further – the Mudra loan from the State Bank of India (SBI) is exactly what you need. It’s a hassle-free and convenient way to get the funds you need to fuel your business aspirations.
The process of applying for this loan isn’t too complicated, but it’s still important to know what you should do. In this article, we’ll provide you with a step-by-step guide on how to apply for a Mudra loan from SBI.
Here, we’ll cover everything you need to know and provide resources that can help make your application a success. With these tips in mind, there will be no stopping you on your journey toward building a successful business!
1. What Is the MUDRA Loan?
The MUDRA loan is a Government of India scheme that provides financial assistance to micro, small and medium-sized enterprises (MSMEs). The main aim of the loan is to empower MSMEs so that they can expand their businesses, create employment opportunities, and contribute to India’s overall economic growth.
The loan is offered through the Pradhan Mantri MUDRA Yojana (PMMY), which provides loans ranging from Rs. 50,000 to Rs. 10 lakhs. It has three categories of loans, namely Shishu, Kishore, and Tarun.
Shishu loans are for businesses in the early stages of development and require minimal documentation; Kishore loans are for businesses that have been successfully running for a few years; and Tarun loans are used by established businesses looking to start new projects or expand their existing ones.
Furthermore, the loan comes with flexible tenure options of up to 5 years with competitive interest rates. Most importantly, it requires minimal paperwork and offers fast approval times. All these features make it an attractive option for MSMEs looking for financing options in order to grow their businesses.
2. Who Is Eligible for the MUDRA Loan?
When it comes to applying for the MUDRA loan with the State Bank of India (SBI), it’s important to know who is eligible. The scheme is designed to help small businesses, small agri-businesses, small trading groups, and even self-employed professionals like doctors and lawyers.
To be eligible for a MUDRA loan from SBI, you will need to meet the following criteria:
- Be an Indian citizen
- Have a valid business plan
- Own a business that is either non-corporate or part of the non-corporate sector
- Have a satisfactory credit history with SBI
If you meet all these criteria, you can apply for the MUDRA loan with SBI. The online process of applying for the loan involves filling out the official MUDRA Loan application form available on SBI’s website.
3. How Much Loan One Can Avail Under the Scheme?
You may be wondering how much loan you can avail of under the Mudra Loan scheme. This entirely depends on your capacity to repay the loan and your expected business needs. The maximum loan amount one can avail ranges from Rs. 10 lacks to Rs. 50 Lakh. However, if your requirements exceed this limit, you will have to opt for a term loan from SBI and provide additional collateral as per the bank’s criteria.
4. What Documents Are Required to Apply for the Loan?
Applying for the MUDRA loan is easy, but getting approved quickly requires some paperwork. To make sure your loan application is processed in good time, you’ll need to provide a few documents.
Personal documents
You’ll need to provide proof of identity and address. This can be done with a government-issued ID like a valid passport, PAN Card or Driving License. As proof of address, you can use utility bills such as electricity, water, and phone bills. You may also need to provide proof of income with pay stubs or bank statements if your business’s turnover is below ₹ 1 crore annually.
Business documents
To apply for the loan, you’ll also have to provide documents related to the business activity and financials:
- An Income Tax Return (ITR) form from the past two years
- A business plan summary that describes how you plan to use the loan funds
- 3 years of Profit & Loss statements (or balance sheets) and recent audited financial statements
If your business is newly set up, you’ll need to show proof of investments such as bank statements and other documents that show how much money has been put into the business. All of these documents will help paint a picture for SBI so they can understand how much money needs to be lent out and assess how likely it is that it will be paid back on time. Once SBI has all these details in hand, they’ll get back to you with an answer in 3 weeks or less!
5. How to Apply MUDRA Loan in the State Bank of India (SBI)
When it comes to applying for a MUDRA loan, you have the choice of either applying online or visiting your nearest State Bank of India (SBI) branch.
Depending on how you want to do it, here are the steps you’ll need to take when applying for a MUDRA loan in SBI:
Applying Online
- Visit the official website of SBI, sbi.co.in
- Click on ‘Apply Now under the ‘Mudra Loans’ section
- Fill in your personal and business information correctly
- Upload all the required documents
- Submit your application and wait for SBI to process it
- Upon successful approval of your application, you will receive a notification via email or SMS with an acknowledgment number
- Track the progress of your loan application online using this acknowledgment number provided by SBI on their website or mobile app
- You can also track the progress at any of their branches by providing them with this number
Visiting an SBI Branch in Person
- Visit your nearest SBI branch with all the required documents
- Fill in an application form available at the branch counter and provide all supporting documents asked for by the bank
- Once all necessary details are verified and approved by bank officials, they will handover a loan agreement form to be signed ledger between you and SBI 4 Sign the loan agreement as per the conditions set out by the bank 5 Receive confirmation via email or SMS
6. Repayment of Mudra Loan and Other Related Information
Once you’ve successfully gotten your Mudra loan, it’s important to know what comes next. After all, you need to ensure that you can pay the loan back over time. Here’s some key information to keep in mind when it comes to repayment:
Interest Rates
The interest rate on Mudra loans is based on the borrower’s credit score and repayment history. Generally, the rates range from 8-13%, but this may vary depending on your individual case.
Repayment Periods
The most common repayment period for a Mudra loan is typically around 5 years, though an individual can apply for a loan with a longer repayment period of up to 10 years. It’s also important to note that there’s no prepayment penalty on Mudra loans, so borrowers can pay off their loans at any time without being charged extra fees.
Late Payment Fees
When it comes to late payments, SBI generally charges a fixed fee of 2% of the outstanding amount if any payments are delayed by 14 days or more. So make sure that you always make your payments on time – this will help keep your interest rates low and help you stay in good standing with your lender!
Conclusion
So, that’s all when it comes to applying for a Mudra loan in SBI. With the right documents and information, you can easily get a Mudra loan and make your financial dreams come true. The process is simple and straightforward, and you can use this guide as a reference if you ever need any help.
At SBI, you can get more details on how to apply for a Mudra loan and the eligibility criteria. There are various other loan options available for you as well, such as car loans, home loans, and business loans. So, whether you need funds for your business or for personal needs, make sure to take a look at all the loan options SBI has to offer.