MUDRA Loan
What is the MUDRA Loan?
The MUDRA Loan is a government-backed program in India that provides financial support to micro and small businesses. Offered in three categories (Shishu, Kishore, Tarun), these loans can range from Rs. 50,000 to Rs. 10 lakh and are a great option for entrepreneurs and business owners looking to grow their ventures.
is Mudra Loan Safe?
MUDRA itself isn’t a lender, so there’s no inherent risk from MUDRA. You’ll be borrowing from a bank or other institution. However, MUDRA loans are typically collateral-free and government-backed, making them a generally safe option for financing your small business. Just be sure to understand the loan terms and choose a reputable lender.
What is Collateral Security in MUDRA Loan?
MUDRA Loans are collateral-free, meaning you don’t need to pledge any assets like property or vehicles as security for the loan. This makes them more accessible for small businesses who might not have assets to offer. However, the lender may still assess your creditworthiness to determine your eligibility and interest rate.
What is the Repayment Period in MUDRA Loan?
The MUDRA agency doesn’t set the repayment period for MUDRA loans. Instead, the specific repayment timeframe is determined by the lender you choose (bank, NBFC, etc.). When applying for a MUDRA loan, be sure to ask about the repayment period to ensure it aligns with your business’s cash flow.
Is CIBIL Score Required for MUDRA Loan?
CIBIL score isn’t mandatory for MUDRA loans. This makes them accessible to a wider range of borrowers, especially those who may be new to the credit system. However, lenders might consider your credit history during the application process, so maintaining a good score can still be beneficial.
Is There Any Subsidy for MUDRA Loan?
No, MUDRA loans themselves don’t come with a direct subsidy from the government. However, they often offer competitive interest rates compared to traditional business loans. This can significantly reduce your borrowing costs and make them a more affordable option for financing your micro or small business.
is Mudra Loan Covered Under CGTMSE?
Yes, MUDRA loans are covered under the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE). This scheme offers partial guarantee protection to lenders in case of loan default by the borrower. This can give lenders more confidence to offer MUDRA loans and potentially translate into better loan terms for you.