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Mudra Loan Interest Rates

Mudra Loan Rates and Other Changes

Last Updated 27th Jan 2022

Interest Rate 8.05%
Processing Fee NIL to upto 0.5%
Loan Tenure Upto 5 years
Maximum Loan Amount ₹ 10,00,000
  • Compare best Mudra Loan offers starting @ 8.05%.
  • The loan limit on Mudra Loan is set across three schemes, namely, Shishu, Kishor, and Tarun.
  • No collateral or security is required to get Mudra Loan.

Mudra Yojana Interest Rate Comparison

The PMMY or Pradhan Mantri Mudra Yojana was set up to facilitate adequate funds for small scale and emerging business units. In order to make it easier for budding enterprises, Mudra loans are provided at affordable interest rates with no collateral. Various lenders like public and private sector banks and NBFCs provide Mudra loans at varying prices. Mudra Yojana Interest rates of some of the leading lenders are listed in the following table.

Mudra Loan Interest Rates

Mudra Loan Bank Interest Rate Processing fee
SBI 11.05% Upto 0.5% of loan amount
Bank of Baroda 8.40% to 9.25% NIL
PNB 8.05% to 10.30% As per customer's profile
Bank of Maharshtra 9.25% to 10.50% As per customer's profile

Loan Limits under Pradhan Mantri Mudra Yojana

The maximum amount that can be availed under the Pradhan Mantri Mudra Yojana is ₹ 10 Lakh. However, the loan amount varies across three schemes, which are distinguished based on the stage of growth and development of the business and financing needs. These are listed as follows: 

  • Shishu: The Shishu scheme offers loans limited up to ₹ 50,000. The maximum tenure to pay off the loan is 5 years in this case. It is usually offered to the borrowers who are about to start their new ventures and are at an early stage of business setups.
  • Kishor: The Kishor scheme offers loans ranging up to ₹ 5 Lakh. However, the tenure is not fixed and may vary across lenders. The Kishor scheme is valid for existing business owners, who need funds to stabilize their business units. Also, in case a new venture requires more funds than what the Shishu scheme offers, he can opt for the Kishor scheme.
  • Tarun: The Tarun scheme offers loans within the range of ₹ 5 Lakh to ₹ 10 Lakh, wherein the bank decides the loan tenure as per its policies. The Tarun scheme provides funds for business people who tend to seek business expansions on a comparatively bigger stage.

Banks offering the Pradhan Mantri Mudra Yojana are required to allot 60% of Mudra loans under the Shishu scheme and the remaining 40% under the Kishor and Tarun schemes.

Key Objectives and Highlights of Mudra Yojana

The Mudra Yojana was set up in 2015. MUDRA stands for Micro-units Development and Refinance Agency. Thus, as per the name, the Mudra Yojana was set, keeping in mind the interest of existing and new small scale and industries. Some of the objectives of Mudra Yojana are listed as follows:

  • To set up directives for business units and enterprises set at a small scale.
  • To get all small business institutions registered under a single platform
  • To help the small industries achieve growth, prosperity, and development
  • To enable lower-income group set up independent business setups
  • To provide easy and quick finance for the micro and medium scale industries
  • To provide funds to the marginalized and dominated sections of the society
  • To regulate business activities like trading and manufacturing in the small scale industries sector.

Mudra Loan Eligibility

The key parameters to get Mudra Loan are age, business type and loan requirement. Mudra loan can be availed by the applicants with an age range of 18 to 65 years. Non-farm income-generating businesses in manufacturing, trading and services can get this loan. This loan can be taken by businessmen with loan requirement of upto ₹ 10 Lakh.

Processing Fee on Mudra Loan

Apart from interest rates, banks charge processing fee on Mudra Loan. Mudra loan charges depends on your financial profile or bank’s guidelines. The processing fee can range from Nil to upto 0.50% of loan amount. Before you apply for a Mudra Loan, check and compare all costs associated with it.


What is the interest rate under the Mudra Loan?

The interest rates charged on Mudra Loans vary across lenders. Also, the Mudra Yojana loan interest rate may vary across the borrower’s credit history and repayment capability.

Which bank is best for Mudra Loan?

Lowest interest on Mudra Loan is 8.05 % offered by PNB, which makes it the best bank for Mudra Loan.

Is there any subsidy for the Mudra Loan?

Presently there are no subsidies available on Mudra Loans. However, the Mudra bank loan interest rate is more affordable and beneficial to the medium and small scale firms.

Is ITR required for Mudra Loan?

To avail of the Mudra Loan, you need to submit certain documents. These include Identity, address, and income proofs such as ITR or Income Tax return documents of at least the last two years.

What is the limit of the Mudra Loan?

The loan limit on the Mudra Loan is ₹ 10 Lakh which is set according to three schemes. The schemes are Shishu- for loans up to ₹ 50,000, Kishore- for loans exceeding ₹ 50,000 to up to ₹ 5 Lakh, and Tarun- for loans amounting to ₹ 5 Lakh to 10 lakhs.

Is there any security needed for the Mudra Loan?

Mudra Loans are unsecured in nature; thus, the borrower does not need to keep anything as collateral or security with the lender.

Is a guarantor required for the Mudra Loan?

Mudra Loans are unsecured; therefore, no form of security is required. Thus, no guarantor is required to avail of a personal loan.

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