Mudra Loan is a specialized loan that is schemed to offer MSMEs a loan facility with a low rate of interest and low documentation requirements.
You can apply for the Mudra Loan in various banks including the bank like UCO Bank which is a Government of India bank.
In this article, we will discuss how to apply for the Mudra Loan in UCO Bank, Documents Required, Eligibility, Types of Mudra loan, etc.
Table of Contents
Types of Mudra Loan
Mudra loan is of three types, each type catering to the requirement of a particular set of individuals. The following are the three types of Mudra Loan that you can apply for in UCO Bank-
Shishu
Shishu means infant, which also signifies the loan requirement. Shishu loan is the loan amount offered for small requirements which require less than Rs.50,000/- as a loan amount.
Kishor
Kishor translates to a teenager meaning the loan amount gets slightly increased which is from Rs.50,000/- to Rs. 5 lakhs/-.
Tarun
Tarun means young or Adult and the loan amount offered in this type of Mudra Loan ranges from Rs.5 Lakhs to Rs.10 Lakhs/-. You can apply for the Tarun loan if your requirement is higher than 5 lakhs.
Eligibility for applying for Mudra Loan
The eligibility criteria for applying for the Mudra Loan are as follow
- The applicant must be a citizen of India
- If you are a startup then a business plan is necessary and if you are a running business then an ITR is a must
- The entity applying for Mudra Loan must be legal like proprietary concern, partnership firm, private limited, public limited company, etc.
How to Apply for the Mudra Loan in UCO Bank?
The following are the Mudra Loans that you can apply for in UCO Bank-
- Visit the UCO Bank premises and ask the bank representative for the Mudra Loan application form
- Now, fill the form with details like name, address, education qualification, business plan, loan requirement, etc.
- After filling out the application form, attach all the documents mentioned below and submit it to the loan department executive
- The executive will review your application and guide you through the loan process and provide you with details related to the interest, tenure, etc.
- After completing the process, you’ll have to pay for the loan application process which will be communicated by the bank. In the case of the Mudra Loan, some banks do not charge any processing fee
- The loan processing may take 2-3 days and you’ll be contacted by the bank officials regarding the loan and may get interviewed as well
- After successful processing of the loan, you will be conveyed whether your loan has been sanctioned or not
- After sanctioning of the loan, your account will be debited with the loan amount
Documents Required for Mudra Loan
The following are the documents required for the Mudra Loan in UCO Bank=
- Identity Proof: Aadhar card, Voter ID card, PAN card
- 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- Credit card bill, Utility bill, etc.
- Income Proof
- Last 12 months’ bank statement
- Business establishment certificate
FAQ
The repayment tenure of the Mudra Loan can be anywhere from 12 months to 5 years.
No, Mudra Loan does not need any collateral requirement. The documentation required for the Mudra loan is low which makes it a very attractive loan for small MSMEs.
Yes, Startups can apply for the Mudra Loan and the sanctioning of the loan is also very easy in this case.
No, the Mudra loan is only for service or manufacturing-based businesses or Startups. Agricultural businesses are kept outside the mudra loan.
For startups, ITR is not necessary however, can help in securing a loan. Instead of ITR, you’ll have to show your business plan with a clear income-generating process.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
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