Union Bank of India MUDRA Loan

Please Note: Union Bank of India is not a Paisabazaar partner. Offers would be from partner banks/NBFCs only.

Union Bank MUDRA Loan Highlights
Particulars	Union Bank Shishu MUDRA Loan	Union Bank MUDRA – Kishore & Tarun STP
Loan Amount	Up to Rs 50,000	Above Rs 50,000 to 10 lakhs (Up to Rs 20 lakhs as per Budget announcement and Official Gazette, 24 October 2024)
Facility	Term Loan	Term Loan, Working Capital
Interest Rates	10.75% p.a.	11.00%-12.00% p.a.
Tenure	3 years	7 years (for above Rs 5 lakh to Rs 10 lakhs); 5 years (for up to Rs 5 lakh)
Processing Fees	NIL	NIL

Interest Rates are updated as of 4 February 2025

Interest Rates of Union Bank MUDRA Loan

Interest Rates of Union Bank Shishu MUDRA Loan

Union Bank of India offers Shishu MUDRA loan at an interest rate of 10.75% p.a. for a loan amount of up to Rs 50,000.

Interest Rates of Union Bank MUDRA – Kishore & Tarun STP

Loan Amount	Interest Rate (p.a.)
Above Rs 50,000 to Rs 2 lakh	11.00%
Above Rs 2 lakh to Rs 10 lakhs	12.00%

Fees & 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 Union Bank MUDRA – Kishore & Tarun STP

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 instalments delayed
Penal interest on non-submission or delay in submission of stock statement	1% p.a.
Prepayment penalty	NIL

Applicants should note that Union Bank provides a 3-day cooling-off or look-up period during which they will not be charged any penalty on loan prepayment.

Features of Union Bank MUDRA Loan

Purpose

Shishu MUDRA Loan: Term loan facility for meeting working capital requirements

Kishore & Tarun STP: Term loan facility for purchase of capital assets and working capital loan facility for meeting working capital requirements of the enterprise.

Loan Amount

Union Mudra loans are divided into the following three categories signifying the growth and funding needs of the beneficiary micro-entrepreneur:

Categorisation	Loan Amount
Shishu	Up to Rs 50,000
Kishor	Above Rs 50,000 to Rs 5 lakh
Tarun	Above 5 lakhs to Rs 10 lakhs*

*However, as per the Budget announcement and the Official Gazette dated 24 October 2024, a new loan category, Tarun Plus, has been introduced. This category offers loans ranging from above Rs 10 lakhs to Rs 20 lakhs to eligible individuals who have previously availed and successfully repaid loans under the Tarun category.

Repayment Tenure

Shishu MUDRA Loan Tenure: 3 years

Kishore & Tarun STP Loan Tenure:

Particulars	Tenure
Working Capital	Repayable on demand
Term Loan for loan amount up to Rs 5 lakh	Up to 5 years
Term Loan for loan amounts above Rs 5 lakh	Up to 7 years

Margin

Shishu MUDRA Loan: NIL

Kishore & Tarun STP:

In the case of Term Loan

Loan Amount	Margin
Up to Rs 5 lakhs	10%
Above Rs 5 lakhs	25%

In the case of Working Capital

Loan Amount	Margin
Up to Rs 5 lakhs	20%
Above Rs 5 lakhs	25%

Security

Shishu MUDRA Loan: Hypothecation of book debts, stocks and other assets purchased out of the loan

Kishore & Tarun STP: In the case of working capital, hypothecation of stocks and book debts and in the case of term loans, hypothecation of assets purchased out of the bank’s finances is required as a security.

Guarantor

Shishu MUDRA Loan: NIL

Kishore & Tarun STP: Personal guarantee of all partners and promoters of the firm or LLPs is required. There is no need for a third-party guarantor.

Eligibility Criteria for Union Bank MUDRA Loan

Union Bank of India offers MUDRA loans to micro-enterprises having business in trading, manufacturing and service sectors under the PM MUDRA Yojana. Professionals like CA/CS/ICWA/Medical professionals/Architect, etc. can also avail Union Bank MUDRA loan.

Eligibility for Union Bank Shishu Loan

• Applicant should be a micro-entrepreneur
• Applicant should have a Union Bank of India (UBI) savings account
• Applicant should have atleast 6 months of banking relationship with UBI or with any other bank
• The loan can be availed for income-generating activities only
• Prospective borrowers should be at the business place while availing of a MUDRA loan
• Applicant should not be a defaulter in any bank or any financial institution
• The mobile number should be registered with the bank & UIDAI

Eligibility for Union Bank MUDRA – Kishore & Tarun STP

• The promoter’s age should be between 21 to 65 years
• The business entity should have a valid Udyam Registration Number (URN)
• Eligible borrowers – Individuals, Partnership concerns (including LLPs) and Proprietorship classified under the category of micro-enterprise as per MSMED Act 2006
• The business entity should have a minimum 6-month-old bank account with any scheduled commercial bank
• The borrower, promoter, or sister concern name should not be in a defaulter list or CFR

Documents Required for availing Union Bank MUDRA Loan

For Union Bank Shishu MUDRA Loan

MUDRA loan applicants have to submit documents digitally on the NeSL platform through the Aadhaar-based OTP system. Business proof or establishment certificate, GST or Udyog Aadhaar are required to be uploaded.

Prospective borrowers should take note of the following while availing of a loan:

• Mobile number is registered with Union Bank and UIDAI.
• PAN, Aadhaar number and latest address are updated in the account

For Union Bank MUDRA – Kishore & Tarun STP

Eligible micro-entrepreneurs can visit the Union Bank of India branch for submission of required documents. Alternatively, eligible individuals or proprietorship concerns can also submit MUDRA loan documents online through the Aadhaar OTP-based system.

FAQs

1. Is there any MUDRA loan for women?

The government has clarified that women of SC/ST and OBC category would be preferred while giving loans under this scheme.

Also Read: Top 5 Business Loan Schemes for Women Entrepreneurs

2. Do all banks give MUDRA loans?

Yes, all the banks such as all scheduled commercial banks in the public and private sector; Regional Rural Banks (RRBs); all Micro Finance Institutions (MFI); Small Business Finance companies and NBFCs and scheduled urban and state co-operatives.

3. Are loans that are covered under MUDRA are collateral-free loans?

Yes, the loans covered under MUDRA are collateral-free loans. However, assets created out of the bank loan to be charged with the bank.

4. Are the loans subsidised by the central government?

No, these loans are not subsidised by the central or state governments.

5. Generally what is the processing time for loans under the MUDRA scheme?

Generally it takes 7- 10 days for processing of lower amounts like Shishu loan while other categories have processing time varying from bank to bank.

6. How can I get PSB loan in 59 minutes from Union Bank?

Interested applicants looking to apply for PSB loans need to visit their official website ”psbloansin59minutes.com” and further select their desired lender (Union Bank) to proceed with loan formalities.

7. How can I get a Mudra loan application form?

To download Mudra loan application form you can click on the link below and scroll down to get the link of loan application form in Hindi and English.
https://www.unionbankofindia.co.in/english/mudra-loan.aspx

8. How can I check my Union Bank Mudra loan status?

Ans. To check your Mudra loan application status, you can either call the bank’s toll-free number (1800-22-2244) or visit the nearest bank branch along with the loan details like reference number or loan application number.