Microloans
Microloans for small earners and first-time borrowers
A microloan is a small-ticket loan for households with modest incomes — street vendors, small farmers, artisans, home-based businesses and first-time borrowers with little or no credit history. Lenders regulated by the RBI under its microfinance framework assess repayment capacity on household income, and many lend to individuals or through joint-liability groups. Repayments are small and frequent, so the loan fits the rhythm of daily or weekly earnings.
Why borrowers pick it
What a microloans gives you
No collateral
Microloans are unsecured. Approval rests on household income and, for group loans, the group's joint commitment.
Open to thin credit files
A limited or missing credit history is not a barrier — many borrowers take their first formal loan this way and build a record.
Small, frequent instalments
Weekly, fortnightly or monthly repayments sized to what your household earns.
Capped repayment burden
RBI rules require lenders to limit total loan repayments to a share of household income, which guards against over-borrowing.
Eligibility
Who qualifies for a microloans
Criteria differ by lender. These are the ranges our partners commonly apply — the exact rule is shown on each offer.
The applicant
- Within the lender's age limits
- Household income within the RBI's microfinance limit
- Indian resident within the lender's area of operation
- Valid KYC documents
For group loans
- Membership of a joint-liability or self-help group
- Group members from the same locality
- Attendance at the lender's group meetings
- No overdue microfinance loans with other lenders
Paperwork
Documents you will need
Keep soft copies ready before you apply — most partners complete verification digitally.
Required
- Aadhaar or another accepted identity proof
- Address proof, if different from the identity proof
- Passport-size photographs
- Bank account details for disbursal
Sometimes asked for
- PAN card or Form 60
- A household income declaration
- Details of any existing loans
Costs
Interest, fees and charges
The rate is only part of the cost. Read this table alongside the total payable shown on each offer.
| Charge | What lenders typically apply |
|---|---|
| Processing fee | A small percentage of the loan amount, set by the lender |
| Interest rate | Set by the lender and disclosed in the key fact statement |
| Prepayment | Nil — RBI rules bar prepayment penalties on microfinance loans |
| Late payment charge | As per the lender's terms, on the overdue amount only |
Figures in brackets are placeholders. Final rates and fees are set by the lending partner and are disclosed in the sanction letter before you accept an offer.
FAQs
Microloans questions, answered
Also compare
Other ways to borrow
Compare microloans offers side by side
Checking offers is a soft enquiry, so your credit score is not affected.