Central government raises loan amount from 10 lakhs to 20 lakhs; who can avail Mudra Loan? Things to know

Are you looking to start your own business? Do you have doubts about where to find the money to fulfill your new idea? Worry no more. Help to start your small business ventures will now come from the government side. Everyone must have heard about Mudra Loan. In the first budget session of the third Modi government, it was announced that financial assistance from Mudra Loan will be increased.

Usually a loan of 10 lakh rupees was given through this. Now the financial assistance has been increased to 20 lakhs. Important things to know about Mudra Loan.

What is Mudra Loan?

It is a scheme initiated by the central government to help non-agricultural enterprises and realize small business ideas. The name of the scheme is Pradhan Mantri Mudra Yojana. Under this scheme, the user will get a loan of 10 lakh rupees and 35 percent subsidy. However, henceforth the loan amount will change to 20 lakhs. The duration of the scheme is five years.

The interest rates in this scheme vary from bank to bank. The Modi government decided to implement this scheme since 2015 to provide financial assistance to small business entrepreneurs. This scheme not only provides loans, but also provides subsidies. The scheme will also help make the users self-sufficient. There are three types of loans under the scheme namely Shishu loan, Kishore loan and Tarun loan. Each loan can vary according to your business ideas.

Advantages of Mudra Loan

1. Before the announcement of the budget, an amount of Rs 50,000 to Rs 10 lakh could be obtained through Mudra Loan.
2. 35 percent subsidy on the loan amount.
3. No guarantee is required for the loan.
4. Small businesses can expand further with the help of loans.

Eligibility

1. Applicants should not have any defaults with banks or financial institutions.
2. Must have a clear idea to start the business.
3. Those between 18 years and 60 years can apply.
4. Those who want to start business alone or in group can also apply.

Documents required to apply for a loan

1. Identity Card
2. PAN card
3. Current mobile phone number
4. Passport size photograph
5. Residence certificate
6. Business license etc

How to Apply

1. Visit the bank from where you want to take the loan from.
2. Ask and understand loan related information from bank officials.
3. Fill up the loan application form.
4. Photocopies of required documents should be submitted to the bank officer along with the application form.
5. The next step is the bank verifying the documents you submitted
6. If you are eligible to get the loan you will get it within few days.

For more information contact the nearest bank.