February 10, 2018 No Comment. Posted in Financial Literacy

Mudra Homes and loans through Mudra are often termed as one. Many times people ask us if we also do Mudra Loans because of the similar names.

Mudra home provide a platform for different financial products spread across the country. The company believes to serve the customer on a first priority and providing financial awareness among the customers. It provides solutions and services related to financial services and consultation regarding the restructure, recovery and collection of debts. We work as a trusted advisors and provide innovative solutions for your debts and investments.  Mudra home aims to fund you with different products available without any amount limit. Mudra homes also help you to find your eligibility for the loan, EMI that fits in your budget and the credit score for free. Now let’s understand what Mudra Loan is.

What is PMMY?

PMMY is Pradhan Mantri MUDRA Yojna was launched by our Honorable Prime Minister which provide loans to non-corporate and non-farm small/micro enterprises. The loans given under PMMY are known as MUDRA Loans. MUDRA refers to Micro Units Development and Refinance Agency.  It is an ordinary loan scheme specially designed to provide funds to small or medium sized business across the nation under MUDRA Bank. All commercial banks, NBFC’s, cooperative banks and small finance banks lend Mudra Loans. The three products that are categorized under MUDRA namely, ‘Shishu’, ‘Kishore’ and ‘Tarun’ signify the stage of growth/ development and funding need of the entrepreneur. The credit line is below 10 lakhs depending on the need of the enterprise.

The amount borrowed under this scheme can be used for multiple purposes, to buy a new vehicle for commercial purpose, aid in working capital, purchase of new plant or machinery or renovation of infrastructure. As per the funding options available under the scheme, the interest rates and loan limits vary according to the growth stage of the enterprise borrowing the loan. the applicable ate of interest and the amount limit is as follows for all the products categorized under MUDRA.

Shishu: the borrowed loan amount under this category is up to Maximum of Rs. 50,000 with an interest rate of 1% per month or 12% every year. The repayment period of the loan amount is up to 5 years.

Kishore: the loan amount that exceeds Rs. 50,000 and goes up to 5 lakhs fall under this category. The interest rate being charged varies from lender to lender, depending on the scheme guidelines and the credit history of the applicant. Repayment period is based on the choice of the Bank/ NBFC.

Tarun: loan amount that exceeds up to 10 lakhs is categorized as Tarun. The rate of interest and the repayment period depends on the Bank/ NBFC in accordance with the scheme guidelines and the credit history of the applicant.

The above points clearly state that the first option – Shishu, caters the budding business at a very affordable rates and a fixed term for the repayment irrespective of the business or applicant’s performance history. However, the change is expected anytime based on the scheme guidelines. Almost 140 financial institutions that includes the public sector, private sector, regional rural, co-operative, microfinance and non banking financial institutions (NBFC). The loan offered though ‘shishu’ consist of 60% of the total scheme and the rest 40% are set to be offered through ‘Kishore’ and ‘Tarun’ scheme.

All financial institutions have a different rate of interest being charged towards Mudra loans. The rate of interest also varies depending on the person and the business it applies. A good credit score and a credit history make your eligible to borrow on better interest rates. For a new buyer borrowing can be a little struggle. The following table shows the interest rates being charged by different financial institutions:

Mudra Loan

 

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