Small & Medium Enterprises need capital for business operations, growth, and new ventures, these capitals can be in the form of loans, investments, or partnerships.
The best way to arrange capital is to apply for a loan, Government of India has launched a special scheme for the MSMEs that can help them with funds up to Rs.10 Lakhs, it is called Mudra Loan.
This scheme is specifically designed to offer funds at a very low-interest rate along with low documentation and almost no collateral requirement.
You can apply for Mudra Loan in various banks including the Union Bank of India. In this article, we will discuss how to apply for a mudra loan in the Union Bank of India? documents required, process, etc.
But first, let’s find out why Mudra loan.
Table of Contents
Why Mudra Loan?
Mudra Loan is a loan scheme that focuses on providing funds to the informal sector that does not have direct access to any formal loan.
The interest rates are low and its best benefit those who have fund requirement up to 10 lakhs rupees. From small street vendors to small shop owners everyone is eligible for taking a loan.
The collateral is also not required to apply for the loan which ensures maximum reachability and availability.
Any shopkeeper, Street Vendor, or small business unit operator can apply for the loan and with minimum documentation, the loan will be sanctioned.
Types of Mudra Loan
The following are the type of Mudra Loan that you can apply for-
| Types of Mudra Loan | Amount |
| Shishu | Rs.50,000/- |
| Kishor | Rs.50,000/- to Rs.5 lakhs |
| Tarun | Rs.5 lakhs to Rs.10 lakhs |
Eligibility Criteria for Mudra Loan
The following are the eligibility criteria for Mudra Loan-
- The individual must be a citizen of India
- The minimum age of the applicant must be 18 years and the maximum age should be 65 years for applying for Mudra Loan
- Any Existing business or a start-up can apply for Mudra Loan
How to Apply for Mudra Loan in Union Bank of India?
The following are the step by step instructions on how to apply for a Mudra Loan in Union Bank of India-
- Visit your nearest Union Bank premises and ask the bank representative for the Mudra Loan application form
- Now, fill the form out with details like name, address, account number in Union bank (if any), education qualification, business type, etc.
- After filling in the details, attach the documents mentioned below and submit them to the bank representative
- The bank representative will review your application and forward the application to the other department
- Now, it can take 7-15 days for the loan to be approved and during the approval, the bank might send some inquiries to your business premises or your home
- After successful grant of the Mudra Loan, you’ll be credited with the amount on your account
Documents Required for Mudra Loan
The following are the documents required for Mudra Loan-
- Duly filled application form with passport-sized photographs
- Business Plan
- KYC documents of the Applicant: Voter’s ID card, Passport, Driver’s license, PAN Card, Aadhar card, Utility Bills (Water and Electricity)
- Bank Statement for the last 12 months
- Company establishment certificate
- Udayam Certification Number
- Proof of belonging to SC/ST, OBC, or any minority group, if applicable
- Any other document required by the bank
FAQ
You can still apply for a Mudra Loan if you do not have a CIBIL Score.
Yes, Women entrepreneurs can apply for the Mudra Loan at special discounted interest rates.
Yes, a start-up can apply for a Mudra Loan with less documentation and attractive interest rates.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
Our main goal is to empower individuals through financial education. We believe that everyone should have the opportunity to build a strong financial foundation. Whether you’re a seasoned investor or just getting started, we provide articles, guides, and resources to help you navigate the financial landscape.
I invite you to join our community of financially savvy individuals. Feel free to ask questions, engage with our content, and explore the topics that matter to you. Together, let’s take control of our financial futures.
