World Entrepreneur Day: You can also Start Your Own Business by taking Loan from PMMY

You can take a loan of up to Rs 10 lakh to start your own business under the Pradhan Mantri MUDRA Yojana (PMMY) run by the government.
World Entrepreneur Day: You can also Start Your Own Business by taking Loan from PMMY
Image Credit: Abp News

Today i.e. on 21st August 'World Entrepreneur Day' is being celebrated all over the world. If you are also planning to start your own business these days, then you can get a cheap loan for it. You can take a loan of up to Rs 10 lakh to start your own business under the Pradhan Mantri MUDRA Yojana (PMMY) run by the government. Today we are telling you about this plan.

No guarantee to be given

The purpose of this scheme which started in 2015, is to provide loans without any guarantee (collateral) to the street vendors to the small businessmen. Any person who wants to start his own business can take a loan under this scheme. Along with this, if someone wants to carry forward his existing business, then he can also get a loan through this scheme.

Get a loan of up to 10 lakhs

PMMY loans are categorized into 3 categories- Shishu loans, with a maximum limit of Rs 50,000. Kishor loan, which has a limit of Rs 50,000 to Rs 5 lakh and Tarun loan, with a maximum limit of Rs 10 lakh. That is, you will be given a loan according to your work.

Business plan to be present to take a loan

Image Credit: MYMoneyMantra
Image Credit: MYMoneyMantra

First of all, the applicant has to prepare a business plan. Along with this, all the necessary documents are also to be prepared for the loan. Along with the usual documents, the bank will also ask you for documents related to your business plan, project report, estimation of future income. So that he knows about your need, as well as can get an idea of ​​how you will benefit or how the profit will increase.

How much interest will have to be paid?

The special thing about the MUDRA loan is that there is no fixed interest rate in it. Different banks may charge different rates of interest on the loan. The interest rate is determined based on the nature of the business and the risk involved. By the way, the interest rate usually remains 10 to 12% per annum.

How to apply for MUDRA Loan?

  • First of all, decide from which bank / financial institution you want to take a loan. Applicants can select more than one bank. The bank needs to fill and submit the loan application form along with the documents.
  • You need to submit the following documents along with the application form for the Mudra loan. Mudra Loan Application, Business Plan or Project Report, Identity Documents like PAN Card, Aadhar Card, Voter ID Card etc.
  • Partnership related documents (deed), tax registration, business license etc. in case of more than one applicant. The number of documents may be more or less depending on the loan amount, nature of business, bank rules etc.

For example, documents related to proof of residence, such as telephone bill/electricity bill etc. Photographs of the applicant less than 6 months old, quotation of the machine or other material that you wish to purchase, as well as information about the supplier/shopkeeper from where you will buy, categories (SC / ST / OBC / Minority), if applicable, last Balance sheet and projected balance sheet for two years (on loan above Rs.2 lakh).

  • For Mudra loan, the application has to be made in that government or any other bank or financial institution that gives Mudra loan. For the application, you will have to submit complete business information/plan along with other necessary documents.
  • If the application is found correct, the bank or financial institution will pass the Mudra loan and the applicant will be provided with a Mudra card (debit card). You can spend it on your own terms.

Highlights of the scheme

  • The loan can be taken under this scheme without guarantee.
  • There is no processing fee to be paid for this.
  • The loan repayment tenure can be extended up to 5 years.
  • A Mudra card is given to the borrower, which can be used by the business for the expenses incurred when the need arises.

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