What Is SBI Mudra Loan: A Detailed Guide for Small Business Owners In 2023

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Hello Friends, if you are looking for a loan to start a new venture or need financial assessment to expand your existing business, the SBI Mudra loan is the best option.

 In this article, you will get all the vital information about Mudra Scheme, how to apply, the eligibility criteria documents required for a loan, and other formalities.

We aim to provide this information to help small and medium enterprises run existing enterprises or start a new business.

Small business owners across India face one of the biggest challenges, a need for more finance to run their businesses smoothly. To deal with this complicated issue, The government of India introduced a scheme called Pradhan Mantri Mudra Yojana (PMMY) in 2015. Respected Prime Minister Shri Narinder Modhi JI launched this scheme.

This loan aims to help and encourage small and medium enterprises by providing them with up to rupees ten lakhs without any guarantee. 

What is SBI Mudra loan?

The State Bank of India provides SBI Mudra loans under the Pradhan Mantri Mudra Yojana to encourage small and medium enterprises. Mudra loans can be used for various business purposes such as purchasing machinery for their business, installing essential equipment, purchasing raw materials, boosting your existing business or starting up a new business, and much more. A Mudra loan does not need any collateral.

Types of SBI Mudra loan.

There are three categories in SBI Mudra Loan

  1. Shishu: the Shishu loan is for those who need a small amount to start a new business to enhance their existing business. In this category, the barrow can get up ₹50,000. This loan is meant for small businesses which are in their initial stage.
  2. Kishore: People who have already started their business fall under this category. Applicants can get loans up to five lakh rupees to upgrade their business. The loan amount under the Kishor category ranges from fifty thousand (50,000) rupees to five lakh rupees.
  3. Tarun This category is the highest in the Mudra loan. Under this category, applicants can get up to ten Lakh rupees to expand their business. They can buy machinery for their business or any other essential assets. Under Tarun Category, the loan amount ranges from five lahks to ten lakh rupees.

SBI Mudra loan interest rate

The interest rate for SBI Mudra loans varies over time depending on the loan amount and category. As of April 2023, the interest rates for the SBI Mudra loan are as follows:

  • Shishu: 8.50% p.a
  • Kishore: 9.50% p.a
  • Tarun: 10.25% p.a

What is the repayment tenure for the SBI Mudra loan?

The repayment period of the SBI Mudra loan depends on the amount you have availed and the category. You can choose a repayment period according to your financial capabilities and business requirements. However, the minimum repayment period is three years, and the maximum is five years.  

What is the maximum loan amount under the SBI Mudra loan?

You can get a maximum amount of ₹10,00,000 under the Tarun category. However, the amount sanctioned by the bank can vary, depending on your credit score and repayment capacity.

SBI Mudra Loan
SBI Mudra Loan

Loan Advice to Avoid Misuse

  1. I suggest borrowing the loan, which is only as per your requirement. Avoid overburdening your business with unnecessary debt which you do not need.
  2. When a bank disburses your loan, make sure to use it for the intended purpose, don’t use the loan amount for any of your personal use. 
  3. Ensure you will pay the timely EMIs of your n loan; delaying will impact your CIBIL score in the future.it is good to maintain all records of your cash, such as payment received, payment is given to the party, and so on, to ensure everything is clear.

State Bank of India Mudra Loan Purpose

  1. Vehicles: You can Purchase commercial vehicles, e-rickshaw, taxis, auto-rickshaws, three-wheelers, goods carriers (small) and passenger vehicles, etc.
  2. Social and community activities: You can use a Mudra loan for opening a boutique, dry cleaning shop, motorcycle repair, photocopy point, etc.
  3. Textiles: Mudra Loan promotes handwork art like embroidery and textile products like cloth badges.
  1. Step-by-step process to apply online for an SBI e-Mudra loan.
  1. First, go to the official website of the State Bank of India (SBI). Click on the “SBI Loans” menu in the top right corner.
  2. From the drop-down menu, you will see e-mudra loan on third no. Click to proceed.
  3. A new window will open. Click to proceed.
  4. Read all terms and conditions carefully and check your eligibility criteria and the documents you need while completing an online application form.
  5. Click on “Apply Now” and carefully all the necessary fields with the required details. 
  6. Upload all the required documents such as proof of address (Aadhar card, electricity bill, or any other), proof of identity (Aadhar card Drawing License Or any other), latest Bank statement, Pan Card, Aadhar card, and proof of business.
  7. Review your filled application form, ensure all the details are correct, and submit.
  8. After successfully submitting the form, you get an acknowledgement from the bank with a reference number. Please save it as a pdf or print it out for future reference

Documents Required for SBI Mudra

The following documents will you required while applying for the SBI Mudra loan. 

  • GST registration certificate 
  • Udyog Registration
  • Shop and establishment certificate
  • Business registration certificate
  • Adhar card, pan card.
  • Please note that all documents should be in PDF, JPG, PNG, or JEPG format, and the document size should not exceed 2 MB. 

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Conclusion

SBI Mudra Loan is a good and excellent choice for you if you need financial help to start or grow your existing business because one of the difficulties small enterprises face is “collateral,” and this loan is collateral free. This loan is a hassle-free loan because the loan application process is online.

Overall, the State Bank of India is one of India’s leading and trustworthy banks, aiming to generate more employment methods. So if you are looking for any startup, an SBI Mudra loan is a good choice for your business if you are looking for any financial assistance.

FAQs

Who can apply for an SBI Mudra loan?

A person who wants to establish a new venture or wants financial assessment for his existing business. They should have a valid business and can apply for an SBI Mudra loan.

The applicant should be between 18 to 60 years of age and have an active SBI account at least six months old.

What is the repayment timeline for an SBI Mudra loan?

The SBI Mudra loan’s repayment period is at least three years, and the maximum tenure is five years. 

Is there any subsidy provided under SBI Mudra Loan?

SBI Mudra loan does not provide any subsidy.

How much amount can we get from SBI E Mudra Loan?

Under the Mudra scheme, the minimum loan amount is Rs 50000, and the maximum is 1000000. Under the Shishu category, barrow can get 50000; under the Kishore and Tarun, barrow can get up to 50000 and 1000000, respectively.

What is the government fee for the Mudra loan?

 Mudra Loans under the Shishu category of up to 50000 have no processing fee. However, the bank can charge a 0.50% processing fee of 50001 to 10 lakh.

What are the types of SBI Mudra loans?

Mudra loan is of three categories Shishu, Kishore, and Tarun. Under the Shishu category, a borrower can get up ₹50000 loans to start the business. Under the Kishore and Tarun category, applicants can get up to five lakhs rupees and 10 lakhs to upgrade the existing business.

Is GST mandatory for Mudra loans?

No GST is not mandatory for applying for an SBI Mudra loan, but it is required; however, if you are going to apply for a Mudra loan, Udyog Adhar is compulsory.

Can I start a business with a Mudra loan?

Yes, if you are going to start a new venture Mudra loan is the best option for you because it is easy to avail and is collateral-free; only you should qualify for the eligibility criteria.

What are the other ways through which I can apply for a Mudra Loan from SBI?

To apply for the Mudra loan, you must visit your nearby SBI branch with all the essential documents. The bank representatives will review your documents, and you will be asked to complete the application form. Once your application form is completed, the loan amount will be disbursed to your SBI bank Account.

Is a Mudra loan available in SBI?

Yes, a Mudra loan is available in the state bank of India with three categories Shishu, Kishor, and Tarun. The loan amount under Shishu is Rs 50000, and under Kishore and Tarun is five lahks and ten lahks, respectively.

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