HDFC Mudra Loan

HDFC, which has its head office in Mumbai, was established in the year 1994. It has expanded its presence since the inception and at present has around 12300 ATMs and 4800 branches across the country. 4.30 lakhs POS terminals have been installed and 235.7 lakh debit cards and 85.4 lakh credit cards have been issued till date. Shri Manmohan Singh, the then Union Finance Minister, inaugurated the bank's first Corporate full-service branch at Worli, Mumbai.

The thrust areas of the bank's business are retail banking, wholesale banking, treasury, and credit cards. The Bank also facilitates the Government Sponsored Schemes and the most extensively promoted Government Sponsored Scheme is the HDFC Mudra Loan.

What is Mudra Loan?

Under the backing of Pradhan Mantri Mudra Yojana which was announced on April 8, 2015, Mudra Ltd., the Micro Units Development and Refinance Agency Ltd. (MUDRA) introduced the Mudra Loan Scheme with the main objective to provide finance to new and up-coming micro-enterprise sector in the country.

All business units which are engaged in trading, manufacturing, and service activities and categorised under the micro-enterprise sector will be given monetary assistance under the scheme.

The maximum funding available will be 10 Lakhs. The scheme is divided into three categories based on the activity and the extent of fund requirement.

Types of Mudra Loan

There are three types of Mudra Loan:

  • Shishu Loan
  • Kishor Loan
  • Tarun Loan

Features of HDFC Bank Mudra Loan

The features of HDFC Bank Mudra Loan are as follows:

  • Purpose: To provide funding to business enterprises involved in trading, service and manufacturing activities that are categorised under the micro- enterprises sector. All the new, upcoming and established units will get funding under the scheme. Encouragement to entrepreneurship is the main objective of this scheme.
  • Eligibility:
    • Non-farm enterprises involved in manufacturing, trading, and services which require credit below 10 Lakhs are eligible
    • The applicant should a good track record and good credit history
    • The applicant should not have defaulted to any bank/financial institution. The applicant should not appear as a defaulter in the CIBIL database.
    • The applicant must possess the skill required for the particular activity undertaken. It would be preferred if the applicant has undergone vocational training in respect of the skill.
    • Education qualification requirement will be decided on the nature of the activity undertaken.
  • Quantum:
    • Shishu Loan: Provide loans up to 50,000
    • Kishor Loan: Provide loans between 50,000 and 5 Lakhs
    • Tarun Loan: Provide loans between 5 Lakhs and 10 Lakhs
  • Nature of facility: Both working capital and term loan facility will be provided. The overdraft amount of 5,000 provided under the PMJDY can be classified under Mudra Loan.
  • Security: Hypothecation of the assets created out of the finance and also the stocks and receivables in case of working capital funds.
  • Margin: Generally, no margin will be insisted for a quantum up to 50,000. For a quantum above 50,000 and up to 10 Lakhs margin as per the guidelines of the bank will be stipulated, but generally it is 10%.
  • Interest: Competitive rate of interest linked to MCLR and will be decided by the bank as per the prevalent guidelines.
  • Repayment: The working capital finance will normally be for a period of 12 months with an annual review. The term loan will be with a maximum period of 3 years with a moratorium period up to 6 months.
  • Processing fees: Will be charged as per the guidelines of the bank from time to time.

Detailed Features of HDFC Mudra Loan

The following are the detailed features of HDFC Mudra Loan:

Name of the Loan Features

Shishu Loan

  • Purpose: To meet working capital requirements and to for expansion and improvement of the existing business or for establishing a new business.
  • Quantum: A maximum quantum of 50,000
  • Interest: As per guidelines of the bank from time to time
  • Margin: Nil
  • Repayment: The working capital limit will be permitted for 12 months subject to an annual review. Becomes payable on demand. The term loan should be repaid within 3 years with a maximum moratorium period of 6 months.
  • Processing fees: Nil

Kishor Loan

  • Purpose: To meet the working capital and the business expansion and development requirement.
  • Quantum: The loan quantum will be between 50,000 and 5 Lakhs.
  • Interest: As per the extant guidelines of the bank
  • Margin: As per the bank's policy
  • Repayment: The working capital becomes payable on demand but will initially be permitted for 12 months subject to an annual review. The term loan should be repaid within 3 years, including the maximum moratorium period of 6 months.
  • Processing fees: As per the bank's guidelines

Tarun Loan

  • Purpose: Working capital and business expansion expenses for the already established business and for expenses incurred in setting a new business.
  • Quantum: The quantum of loan ranges from 5 Lakhs to 10 Lakhs.
  • Interest: Competitive rate of interest linked to MCLR
  • Margin: As decided by the bank on a case to case basis
  • Repayment: The working capital facility will be for 12 months subject to an annual review. It becomes payable on demand. The term loan has to be repaid within 3 years along with the maximum moratorium period of 6 months.
  • Processing charges: As per the guidelines of the bank

Benefits of HDFC Bank Mudra Loan

The following are the benefits of Mudra Loan:

  • Hassle-free loan process
  • No security required
  • Simple documentation and processing
  • Nominal processing charges
  • Competitive rate of interest
  • A co-branded Rupay card will be issued which can be used at ATMs and POS

Eligibility for HDFC Bank Mudra Loan

The following eligibility criteria should be complied with to qualify for the HDFC Mudra Loan:

  • The business enterprise should be categorised under the micro-enterprise sector and should be involved in services, trading or manufacturing activities.
  • The applicant should possess the skill required for the activity
  • It will be preferred if the applicant has undergone any vocational training in respect of the skill
  • The applicant should not in the defaulter list of any bank/financial institution or in the CIBIL database.
  • The educational qualification requirement will be based on the activity undertaken

Documents Required for HDFC Bank Mudra Loan

You will require the following documents to apply for HDFC Pradhan Mantri Mudra Yojana:

  • Loan application form
  • Valid proof of photo identity
  • Proof of current address
  • Income proof: Latest ITR, financial income documents
  • Bank statement of last 6 months
  • Residence/office ownership proof
  • Proof of business continuity
  • Trade references

Why Apply for HDFC Bank Mudra Loan from MyMoneyMantra?

MyMoneyMantra has all the details pertaining to the rate of interest and other offers provided for the loan products by various banks on a single screen, which makes it convenient to make the comparison in order to settle for the best deal. If you had to take up the ordeal all by yourself it would take all the time in the world to accumulate that kind of data.

After comparing the data available on the MyMoneyManra website, you choose the lender you feel is giving the best deal through MyMoneyMantra since the whole process will be made easy. After the process of filling the application is complete, Business Loan Specialists of MyMoneyMantra will take care of the process from there till the approval of the loan.

How to Apply for HDFC Mudra Loan through MyMoneyMantra?

To apply for HDFC Mudra Loan through MyMoneyMantra, you should make use of the digital platform provided by MyMoneyMantra for this purpose:

  • Go to the Business Loan tab under Loans option
  • Choose the required product from the list
  • Provide the required information to apply for the loan
  • You will be contacted by the MyMoneyMantra team who will guide you through the process required after completing the application for the loan. You will get guidance in respect of the documentation and the whole process that continues till the approval of the loan.

How to Calculate EMI for HDFC Mudra Loan?

Loans that can be paid in EMIs are the best for business owners as it will give an idea of the uniform commitment for which a provision has to be month after month. To check the loan eligibility, it is essential to calculate the EMI before applying for the loan to decide the loan amount and tenure that is convenient for you.

You can use MyMoneyMantra's instant EMI Calculator available online to calculate the EMI. Just select the EMI Calculator option under Financial Tools tab and enter the needed details.

HDFC Bank Mudra Loan - Customer Care Number

The Customer Care Number of HDFC Bank is 1800 266 4060

Frequently Asked Questions

What is the procedure to apply for Mudra Loan?

You can contact the concerned bank from where you wish to avail the loan or you can visit the bank. You can also apply online through MyMoneyMantra.

Should the applicant be the customer of the bank where he/she intends to avail loan?

Though it is not a compulsion to have an account in the bank where you intend to apply for the loan, you will definitely get preference if you are banking with the same bank you are applying for the loan from.

Which is the best-suited loan under the Mudra Scheme for the start-ups?

It is best suited to avail loan under Shishu since it does not require any elaborate financials to assess the requirement. All you have to do is present your business plan along with the application form and relevant documents. If the loan is approved, then you will have to give quotations and invoices if you avail a term loan for equipment.

How is the Mudra Card beneficial to the borrower?

Mudra Card is a co-branded debit card issued to the borrower availing working capital finance under the Mudra Loan. The borrower will be able to use the ATM and transact at POS using the card. The card will have a per day cash withdrawal and POS transaction limit, which will be different for the three categories under the Mudra Loan.

Which is the agency monitoring the implementation of Pradhan Mantri Mudra Yojana?

The State Level Bankers' Committee (SLBC) forum at the state level and MUDRA at the National level will be monitoring the implementation and progress of PMMY. Reports are generated periodically on the portal developed by Mudra to consolidate the activities of various organisations. The lending institutions have to provide the individual progress report under the Mudra Scheme on this portal, which will be later consolidated to generate a report.

Is there any subsidy provided under the Mudra Scheme?

No, there is no subsidy provided for the loan given under PMMY.

What is the security required for Mudra Loan?

Banks have been instructed not to insist for collateral security for loans up to 10 Lakhs sanctioned to MSME sector by the working group formed by RBI to review the Schemes for Credit Guarantee for the MSEs.

Is there any standard application form available to apply for the Mudra Loan?

Yes, in the case of Shishu category, the application form is a one- page format and is available on the Mudra website. In the case of Kishore and Tarun category, there is a 3-page format which is available on the Mudra website.

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