• MUDRA Loan Interest Rate

    MUDRA loan is offered by banks to aid non-corporate, non-farm sector income generating microenterprises that require credit below Rs.10 lakh. Interest rates on MUDRA loans start at the rate of 7.30% p.a. and the loan repayment tenure ranges between 1 year and 7 years.

    MUDRA Loan Details

    Interest Rate   7.30% p.a. onwards  
    Loan Amount   Up to Rs.10 lakh  
    Loan Tenure   Up to 7 years  
    Processing Fee   Subject to the lender 

    MUDRA Loan Interest Rate by Banks 

    Bank Interest rate Tenure
    HDFC Bank  As per bank guidelines  At the discretion of the bank
    ICICI Bank  As per bank guidelines  At the discretion of the bank
    Allahabad Bank  As per bank guidelines  1-5 years 
    Bank of Baroda  9.65% p.a. At the discretion of the bank
    Bank of Maharashtra  9.25% p.a. At the discretion of the bank
    Bank of India  Linked to MCLR 1-7 years 
    Canara Bank  As per bank guidelines  Up to 7 years
    Central Bank  As per bank guidelines  At the discretion of the bank
    IDBI Bank  Linked to Bank’s Base Rate and Rating 1-5 years 
    Indian Overseas Bank  As per bank guidelines  At the discretion of the bank
    Oriental Bank of Commerce  As per bank guidelines  At the discretion of the bank
    State Bank of India (SBI)  Linked to MCLR 1-5 years 
    Tamilnad Mercantile Bank  8.95% p.a. onwards 1-7 years 
    UCO Bank  8.85% p.a. onwards  At the discretion of the bank
    Union Bank of India  7.30% p.a. onwards At the discretion of the bank
    Vijaya Bank  9.65% p.a. (Merged with Bank of Baroda) At the discretion of the bank

    Loan Quantum under MUDRA Yojana 

    MUDRA Loan is offered under 3 different schemes. The loan amount is dependent on these schemes. The schemes are as follows: 

    Name of Scheme  Loan Amount 
    Shishu  Up to Rs.50,000 
    Kishor  Rs.50,000 to Rs.5 lakh 
    Tarun  Rs.5 lakh to Rs.10 lakh 


    1. Why are the interest rates different for different institutions?

      MUDRA loans are unsecured in nature as no collaterals are required to avail the loan. This is a reason why interest rates vary from institution to institution as every organization calculates the risk factor on its own and establishes rates accordingly.

    2. What does the MUDRA application form look like?

      For the starting category of Shishu Loans, a 1-page application form needs to be duly filled and submitted. For Kishor and Tarun categories of loans, a 3-page application form needs to be submitted.

    3. Where can I find the MUDRA Loan application forms?

      You can find the application forms online on the MUDRA website or get one from any of the intermediaries.

    4. What is the repayment criteria for MUDRA Loans?

      The repayments terms and conditions are decided by the intermediary lending institution according to its rules considering the cash flow of the business in question.

    5. Do all banks in India fall under the MUDRA Scheme?

      Yes, the Department of Financial Services (DFS) has already sent advisories to Public Sector Banks, Scheduled Commercial Banks and Regional Rural Banks for bringing all loans up to Rs.10 lakhs disbursed for non-farm income generation activities after April 7th 2015 under the MUDRA Scheme. The DFS has also instructed all banks to provide loans under the scheme and put targets per branch.

    6. Is the PMMY Scheme active now?

      Yes, the scheme has been active since April 8th 2015 throughout the country.

    7. How long is the processing time for Loans under the MUDRA Scheme?

      Lower amount Shishu loans are generally disbursed within 7-10 days while the other categories have processing times varying from lender to lender.


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