Government-backed loan schemes help individuals and businesses access funds by leveraging their property as collateral. These schemes come with lower interest rates and favorable terms, making them a great option for those in need of financing. Here’s a detailed look at the best government loan against property schemes in India for 2025.

1. Pradhan Mantri Mudra Yojana (PMMY)

The MUDRA scheme offers loans to small businesses, including those seeking funds against property. While primarily designed for unsecured loans, some banks provide MUDRA loans under the Tarun category with property as collateral.

• Loan Amount: Up to ₹10 lakh
• Eligibility: Small business owners, MSMEs, startups
• Interest Rate: Varies by lender (typically lower than market rates)
• Tenure: Up to 7 years

2. Stand-Up India Scheme

This scheme is designed for SC/ST entrepreneurs and women-led businesses, allowing them to raise capital for business expansion using property as collateral.

• Loan Amount: ₹10 lakh to ₹1 crore
• Eligibility: SC/ST and women entrepreneurs in manufacturing, trading, or services
• Interest Rate: Linked to MCLR (lower than private bank rates)
• Tenure: Up to 7 years with a moratorium of 18 months

3. Credit Linked Capital Subsidy Scheme (CLCSS)

While CLCSS is mainly for technology upgrades, MSMEs can avail term loans secured against property under this scheme to modernize their business operations.

• Loan Amount: Up to ₹1 crore
• Eligibility: Registered MSMEs in manufacturing or service sectors
• Interest Rate: Concessional rates, plus a 15% capital subsidy
• Tenure: Depends on lender policies

4. CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)

CGTMSE primarily offers collateral-free loans, but some lenders provide secured loans under this scheme, allowing MSMEs to pledge property for higher loan amounts.

• Loan Amount: Up to ₹2 crore
• Eligibility: New and existing MSMEs
• Interest Rate: Bank-specific, lower than market rates
• Tenure: Up to 10 years

5. PSB Loans in 59 Minutes

This government initiative allows businesses to apply for quick loans using property as collateral through an online portal linked with major public sector banks.

• Loan Amount: ₹1 lakh to ₹5 crore
• Eligibility: MSMEs and self-employed individuals
• Interest Rate: Starts at 8% (varies by credit profile)
• Tenure: Up to 15 years

6. PM SVANidhi (for Street Vendors)

While not directly a loan against property, vendors owning commercial spaces can pledge them to increase their loan limits under the PM SVANidhi scheme.

• Loan Amount: Up to ₹50,000 in multiple tranches
• Eligibility: Registered street vendors
• Interest Rate: Subsidized, based on lender policies
• Tenure: Up to 3 years

7. SIDBI’s Refinancing Scheme for MSMEs

The Small Industries Development Bank of India (SIDBI) offers refinancing solutions to banks providing loans against property to MSMEs.

• Loan Amount: Up to ₹5 crore
• Eligibility: Manufacturing and service MSMEs
• Interest Rate: 6%-9% (based on tenure and applicant’s credit profile)
• Tenure: Up to 10 years

Benefits of Government Loan Against Property Schemes

✔ Lower Interest Rates: Government-backed schemes offer cheaper loans than private lenders.
✔ Longer Repayment Periods: Some schemes provide extended tenure, reducing EMI burden.
✔ Easier Access for MSMEs & Startups: Tailored support for business growth.
✔ Subsidies & Incentives: Many schemes include financial benefits like interest subvention and capital subsidies.

Conclusion

Government-backed loan against property schemes in India provide businesses and individuals with access to affordable credit. Whether you are an MSME, a startup, or an entrepreneur, these schemes can help you leverage your property for business expansion, working capital, or modernization. Before applying, compare interest rates, tenure, and eligibility to choose the best scheme for your needs.