Union Bank of India Mudra Loan
Last Updated : Nov. 23, 2024, 3:22 p.m.
Union Bank of India offers MUDRA loans under two distinct programs: Digital Shishu Mudra Loan STP and Mudra (Kishor & Tarun) STP. These loans are crafted to support the financial needs of micro-enterprises across different sectors. Whether you need funds for working capital, acquiring assets, or other business expenses, these loans might be suitable. This overview will help you understand the key features of each loan type and how they might benefit your business.
Types of Union Bank of India Mudra Loan
Below, we have discussed the two main types of mudra loan offered by Union Bank of India:
Feature | Digital Shishu Mudra Loan STP | Mudra (Kishor & Tarun) STP |
|---|---|---|
Maximum Loan Amount | Rs. 50,000 | Up to Rs. 10 lakh |
Margin | Nil | 10% for Kishore; 25% for Tarun |
Collateral | None | Covered under CGTMSE |
Guarantee | None | Personal Guarantee required |
Interest Rate | EBLR + 1.25% | Variable, as per bank rates |
Repayment Period | Up to 36 months | Up to 84 months for Tarun |
Processing Fees | None | None |
Convenience Fee | Rs. 950 + GST | 1000 plus GST |
Digital Options | Fully digital process | Digital document execution available |
Branch Visit | Not required | Optional |
Digital Shishu Mudra Loan (STP)
The Digital Shishu Mudra Loan (STP) is specifically designed for existing Shishu MUDRA customers who require term loans to meet their working capital needs. Here’s what you need to know:
- Purpose: Provides term loans for working capital requirements.
- Maximum Loan Amount: Up to Rs. 50,000.
- Repayment: Loans must be repaid within a maximum period of 36 months through equated monthly installments. There is no moratorium period, and applicants can choose a repayment tenure between 12 to 36 months at the time of loan application.
Features of Digital Shishu Mudra Loan
Here are the key features of Digital Shishu Mudra Loan that you should be aware of:
- Margin: There is no margin requirement.
- Security: Requires hypothecation of stocks, book debts, and other assets created or purchased out of the bank finance.
- Collateral and Guarantee: Neither collateral nor personal guarantees are required.
- Processing and Documentation Charges: A convenience fee of Rs. 950 plus GST and actual stamp duty are charged, which are auto-recovered at the time of disbursement.
Process to Apply for Union Bank of India Shishu Mudra Loan
The entire application process for the Digital Shishu Mudra Loan is digital, from application to disbursement. Click on ‘New Application .’ Then ‘Accept & Proceed’. Fill in the details and submit your application.
Mudra (Kishor & Tarun) STP
For businesses that require more substantial funding, the Mudra (Kishor & Tarun) STP offers larger loans to both existing and new customers.
- Purpose: Offers need-based term loans or working capital limits to acquire capital assets and/or meet working capital requirements, strictly for income-generating business activities.
- Loan Amount:
- Kishore: Rs. 50,001 to Rs. 5 lakhs.
- Tarun: Rs. 5 lakhs to Rs. 10 lakhs.
Features of Mudra (Kishor & Tarun) Loans
Here are the main features of Kishore and Tarun loans offered by Union Bank of India that you must know:
- Margin: 10% for Kishore loans and 25% for Tarun loans.
- Repayment:
- Kishore: Repayable within 60 months.
- Tarun: Repayable within 84 months.
- Security: Requires hypothecation of stock and book debts. For term loans, a charge on assets financed by the bank is mandatory.
- Collateral: No collateral is required as loans are covered under the CGTMSE scheme.
- Guarantee: A personal guarantee for all promoters is needed. No third-party guarantor is accepted.
Application Process to Apply for Union Bank Kishore & Tarun Loans
Visit the Union Bank of India's official website. Apply for ‘ Kishore and Tarun ’ loans. Then click on continue and log in using your credentials. Fill in the details and apply for the loan.
Union Bank of India Mudra Loan Interest Rates
- Digital Shishu Mudra Loan: The interest rate is EBLR + 1.25% at present. Penal interest may apply as per the terms and conditions.
- Mudra (Kishor & Tarun) STP: Interest rates are variable and aligned with the prevailing bank rates.
Fees and Charges of Union Bank Mudra Loan
For Union Bank Shishu Loan
Particulars | Charges |
|---|---|
Processing Fees | NIL |
Digital Convenience Fee | Rs 1,000 |
Stamp Charges | Rs 171 |
Insurance Charges | NIL |
For Kishore and Tarun Loans
Particulars | Charges |
|---|---|
Processing & documentation Charges | NIL |
Digital Convenience Fee | Rs 1,000 |
Penal interest on delayed payments | 2% p.a. for the duration of the installments delayed |
Penal Interest on non-submission or delay in submission of stock statement | 1% p.a. |
Prepayment Penalty | NIL |
Union Bank of India Mudra Loan Eligibility Criteria
For Digital Shishu Mudra Loan:
- Applicants must be existing individual micro enterprises engaged in manufacturing, trading, or service sectors and not be defaulters in any bank or financial institution.
- Applicants must already hold a savings account with UBI and should have a banking relationship of at least 6 months with UBI or any other bank.
For Kishore & Tarun Loans:
- Open to both existing (ETB) and new (NTB) micro-business enterprises engaged in manufacturing, service, trading, or allied agricultural activities.
- The promoter's age must be between 21 to 65 years.
- All applicants must have a valid Udyam Registration Number.
- Borrowers must have bank accounts with any scheduled commercial bank that is at least six months old and not be listed in any defaulters' lists.
List of Activities for Which You Can Avail Union Bank of India Mudra Loan
Users can avail Mudra loan from Union Bank of India for the following list of activities:
- Transport Vehicles: You can get financial help to purchase vehicles that are used to transport goods and people. This includes taxis, auto rickshaws, small freight carriers, three-wheelers, e-rickshaws, and similar vehicles. Business-specific vehicles like tractors and two-wheelers are also covered.
- Community, Social, and Personal Services: Financial support is available for businesses such as beauty parlors, gyms, salons, tailoring, dry cleaning, bicycle and motorcycle repair shops, photocopy centers, pharmacies, and courier services.
- Agricultural Activities: You can obtain loans for agriculture-related ventures like fish farming, beekeeping, poultry, livestock rearing, and dairy farming. This also covers agricultural businesses such as food processing and agricultural clinics, but not for buying land or improving it with irrigation or wells.
- Business Loans for Traders and Shopkeepers: Traders, shopkeepers, and service providers can get loans up to ₹10 lakh to support their businesses.
- Textile Products Sector: Financial aid is provided for those involved in textile industries, such as handloom weaving, khadi production, embroidery (including zari and zardozi), and making textile products like bags and apparel.
Conclusion
Union Bank of India's MUDRA loans are designed to provide essential support to small businesses, helping them expand and compete effectively in the market. With features like competitive interest rates and no collateral requirements for certain loans, these programs are accessible to many business owners.
Frequently Asked Questions (FAQs)
