{"id":4530,"date":"2021-05-12T20:12:44","date_gmt":"2021-05-12T14:42:44","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=4530"},"modified":"2024-08-02T11:31:00","modified_gmt":"2024-08-02T06:01:00","slug":"mudra-loan-definition-features-eligibility","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/","title":{"rendered":"Mudra Loan: Definition, Features, Eligibility, and more"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">MSMEs often find it difficult to avail loans from banks via traditional borrowing channels due to lack of security and inadequate funds for paying off high-interest rates. To solve this, the Government of India launched the Pradhan Mantri MUDRA Yojana (PMMY) in 2015, which would help accelerate the growth and development of small and medium-sized businesses. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">In this blog, we have covered everything you need to know about Mudra loan.<\/span><\/p>\n<p><span data-sheets-root=\"1\" data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Related Read: MSME Registration In India: Eligibility, Process, and Documents Required in 2024&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:332799,&quot;3&quot;:{&quot;1&quot;:0},&quot;4&quot;:{&quot;1&quot;:2,&quot;2&quot;:14277081},&quot;5&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;6&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;7&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;8&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;9&quot;:0,&quot;10&quot;:1,&quot;11&quot;:3,&quot;12&quot;:0,&quot;15&quot;:&quot;Calibri&quot;,&quot;19&quot;:0,&quot;21&quot;:0}\">Related Read: <a href=\"https:\/\/razorpay.com\/learn\/msme-india-registration\/\">MSME Registration In India: Eligibility, Process, and Documents Required in 2024<\/a><\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d39273956b5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d39273956b5\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#What-is-Mudra-loan\" >What is Mudra loan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Eligibility-for-Mudra-loan\" >Eligibility for Mudra loan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Mudra-loan-categories\" >Mudra loan categories<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#How-to-apply-for-Mudra-loan-online\" >How to apply for Mudra loan online<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#How-to-apply-for-Mudra-loan-offline\" >How to apply for Mudra loan offline<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Documents-required-to-apply-for-Mudra-loan\" >Documents required to apply for Mudra loan\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Limitations-of-Mudra-loan\" >Limitations of Mudra loan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Get-Collateral-free-loans-for-your-business-with-Razorpay\" >Get Collateral-free loans for your business with Razorpay\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Working-Capital-Loans\" >Working Capital Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#Cash-Advance\" >Cash Advance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/mudra-loan-definition-features-eligibility\/#RazorpayX-Corporate-Credit-Cards\" >RazorpayX Corporate Credit Cards<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-Mudra-loan\"><\/span><b>What is Mudra loan<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Mudra loan is a financial aid of up to Rs. 10 Lakh provided by the Micro Units Development and Refinance Agency to businesses in the non-corporate, non-farm, trading and manufacturing sector.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Eligibility-for-Mudra-loan\"><\/span><b>Eligibility for Mudra loan<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The loans under the PMMY scheme can be availed by small businesses for commercial purposes, as listed below.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Purchasing autos, cars, two-wheelers or any other vehicle\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Working capital<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For plant and machinery<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Revamping or remodelling business space<\/span><\/li>\n<\/ul>\n<p><i><span style=\"font-weight: 400;\">Mudra also operates a unique refinance scheme for female entrepreneurs to empower women in business, called Mahila Uddyami Scheme.<\/span><\/i><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/current-accounts\/?r=blog_cta_business_banking_mudra_loan&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Apply for a collateral-free loan now!<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Mudra-loan-categories\"><\/span><b>Mudra loan categories<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Mudra loan is granted under three categories, depending on the loan amount needed to grow your business.\u00a0<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"font-weight: 400;\">Shishu<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Kishore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Tarun<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Covering loans up to Rs. 50,000\/-<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covering loans above\u00a0 50,000\/- and up to Rs. 5 Lakh<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Covering loans above Rs. 5 Lakh and up to Rs. 10 Lakh<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"How-to-apply-for-Mudra-loan-online\"><\/span><b><br \/>\nHow to apply for Mudra loan online<br \/>\n<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Businesses can apply for Mudra loan via the official website of Commercial banks, RRBs, small finance banks, MFIs and NBFCs. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">To register for the Mudra loan, follow these steps:\u00a0<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Download the loan application form from the bank\u2019s website<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fill in the required details\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Submit the form along with the necessary documents, as mentioned below<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proceed with the formalities as directed by the bank representative\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The bank will approve and disburse the loan amount after processing and verifying the loan application form and attached documents, <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Now, borrowers can also file online applications for Mudra loans on the <\/span><a href=\"http:\/\/www.udyamimitra.in\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Udyamimitra portal<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"How-to-apply-for-Mudra-loan-offline\"><\/span><b>How to apply for Mudra loan offline<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Visit the nearest branch of the desired bank that can provide Mudra loan<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Present the self-written business plan to the concerned authorities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Submit the downloaded and duly filled loan application form<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Submit the required documents as directed by the concerned authorities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The bank shall approve and disburse the loan amount after verification<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"Documents-required-to-apply-for-Mudra-loan\"><\/span><b>Documents required to apply for Mudra loan\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In order to successfully apply for Mudra loan, applicants must attach a copy of the following documents along with the application form.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Comprehensive business plan<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Duly filled application form that can be downloaded from the bank\u2019s website<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">2 recent passport-sized photographs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proof of Identity; this may be your passport, voter\u2019s ID card, driving license or Aaadhar card<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proof of age or date of birth<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proof of address<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Last 6 months\u2019 bank statement<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Special category proof in case the applicant belongs to SC\/ST\/OBC or any other special category.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Limitations-of-Mudra-loan\"><\/span><b>Limitations of Mudra loan<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The maximum loan amount that can be disbursed is Rs. 10 lakh<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The repayment period is between 3 to 5 years, including a moratorium of up to 6 months, depending on the activity\/ income generation. WC\/TL to be reviewed annually<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The processing fees are nil for Shishu and Kishore, but 0.50% (plus applicable tax) of the loan amount is applicable for Tarun loan categories<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Get-Collateral-free-loans-for-your-business-with-Razorpay\"><\/span><b>Get Collateral-free loans for your business with Razorpay\u00a0<\/b><b><br \/>\n<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">We, at Razorpay, understand that getting loans for MSMEs via banks or other government schemes is not easy. So, we built a solution to help businesses get funds for their capital requirements easily. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Razorpay Capital can <\/span><a href=\"https:\/\/bit.ly\/3rva5rl\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">solve cash flow challenges<\/span><\/a><span style=\"font-weight: 400;\"> for your business via:\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Working-Capital-Loans\"><\/span><b>Working Capital Loans<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Razorpay\u2019s NBFC and banking partners offer loans for businesses collateral-free, at competitive rates with flexible repayments. You can apply for the loan online hassle-free and get the cash-in-hand quickly. <\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cash-Advance\"><\/span><b>Cash Advance<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Razorpay Cash Advance offers an unsecured line of credit to manage cash requirements prior to customer payments. You can withdraw cash up to your credit limit, repay when customers pay and borrow again when in need.\u00a0<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"RazorpayX-Corporate-Credit-Cards\"><\/span><b>RazorpayX Corporate Credit Cards<\/b><span style=\"font-weight: 400;\"><br \/>\n<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">You can get a 50-day interest-free credit limit for your business with RazorpayX Corporate Credit Cards. And, simplify digital payments towards Google Ads, AWS, Facebook Ads, etc.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Ensure access to working capital and accelerate your business growth with Razorpay.<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/x.razorpay.com\/auth\/signup?r=blog_cta_business_banking_mudra_loan&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Apply for a collateral-free loan now!<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Mudra loan is a financial aid of up to Rs. 10 Lakh provided by the government to small and medium-sized businesses. Read on to know more. <\/p>\n","protected":false},"author":151156479,"featured_media":4533,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3437],"tags":[],"class_list":{"0":"post-4530","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4530","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156479"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=4530"}],"version-history":[{"count":9,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4530\/revisions"}],"predecessor-version":[{"id":12179,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4530\/revisions\/12179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/4533"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=4530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=4530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=4530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}