Mudra Loan is a specialized loan that helps Startups and MSMEs in getting financial liquidity to establish a new venture or expand their operation respectively.
Mudra Loan was started to provide funds to that sector of the society who are not generally eligible for taking loans from the bank. This includes street vendors, small shop owners, etc.
What makes this loan different from other business loans is that the mudra loan requires less documentation and offers low-interest rates as compared to other loans.
You can apply for Mudra Loan in various Banks in India including the UCO Bank which is one of the best Government Banks in India.
In this article, we will discuss how to apply for the Mudra Loan in UCO Bank, Documents Required, Eligibility, Types of Mudra loans, etc.
Eligibility for Mudra Loan
The following are the eligibility criteria for the Mudra Loan-
- The applicant must be a citizen of India to avail of this loan
- The applicant’s age must be above 18 years of age
- The applicant must have a proprietary concern, partnership firm, private limited, public limited company, and any other legal entity registered with the Government (for Kishor and Tarun)
Types of Mudra Loan
Mudra is an acronym for Micro Units Development and Refinance Agency Scheme which is designed for the growth and development of MSMEs. There are three different types of Mudra Loan catering to three different criteria for the individual. The following are different types of Mudra Loan-
Shishu Mudra Loan is offered to the individual who is in requirement of less loan i.e. Rs.50,000/- or less. This loan is best for those who wanted to start up their business with the very basic requirement.
Kishor Mudra Loan is offered to the individual who required a loan amount ranging from Rs.50,000/- to Rs.5 lakhs/-.
Tarun Loan is offered for individuals who required loan amounts ranging from rs.5 Lakhs/- to Rs.10 Lakhs/-
How to Apply for the Mudra Loan in UCO Bank?
You can follow these steps to apply for the Mudra Loan in UCO Bank-
- Visit the nearest UCO Bank premises and ask the bank representative for the Mudra Loan application form
- Now, fill the application form with details like name, address, educational qualification, business details, etc.
- After filling out the application form, attach the documents mentioned below
- Now, submit this to the bank representative, the bank representative will review your application and ask a question to your regarding the loan requirement, etc.
- After that, you’ll have to pay the loan processing fee which will be as per the bank rules
- After the payment of the processing fee, your application and documents will be sent to the relevant department
- The department will further investigate your loan request and will provide you with the information related to your loan application
- After successful processing your loan request, you will be notified about the status of the loan and if the loan is passed then you will receive the funds into your account within a few days
Documents Required for Mudra Loan
The following are the documents required for the Mudra Loan-
- Identification ID-Aadhar card, Voter ID card, PAN card
- Detailed Business Plan
- ID Proof of SC/ST category, if any applicant falls under this category
- 2 passport-size photographs of the applicant
- Age Proof
- Address Proof
- Income Proof
- Last 12 month’s bank statement
- Business establishment certificate
- UDYAM and Startup India registration
- GST number
Yes, ITR is required for the Mudra Loan and only the existing businesses or enterprises are required to submit the ITR.
The repayment period for the Mudra Loan can be anywhere from 12 months to 5 years.
No, Mudra Loan does not need any collateral requirement for the Mudra Loan.
No, there is no Mudra Loan processing fee in the UCO Bank.