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    Mudra Loan Interest rates

    Pradhan Mantri Mudra Yojana is a special scheme set up by the Government of India through an institution named Micro Units Development & Refinance Agency Limited (MUDRA) in order to provide financing aid through loans to the non-corporate non-farm sector income generating activities of micro and small entities (subject to those enterprises with credit needs below INR 10 lakhs). The Pradhan Mantri Mudra Yojana (PMMY) has three facilities or options available for catering to enterprises at different stages of growth and financing needs. These options are Shishu, Kishore and Tarun.

    Mudra Loan Interest rates 2018 (Updated)

    Mudra Loan Bank Interest rate Tenure
    HDFC 12.75% to 20% 1-5 years
    HDBFS 15.95% to 18.95% 1-3 years
    Tata Capital 13.49% to 19.50% 1-5 years
    Kotak Mahindra Bank 11.5% to 18% 1-5 years
    Capital First 13% to 20% 1-5 years
    Citibank 12.75% to 15.75% 1-5 years
    IndusInd Bank Ltd 12.99% to 18.25% 1-5 years
    Fullerton 19.50% to 37% 1-4 years
    Standard Chartered Bank 12.50% to 17% 1-5 years
    ICICI Bank 11.49% to 17.50% 1-5 years
    Aditya Birla Finance Ltd 14% 1-3 years
    Allahabad Bank 13.70% 1-5 years
    Bank of Baroda 14.15% 1-3 years
    Bank of Maharashtra 15.20% 1-3 years
    Bank of India 12.7% to 14.7% 1-3 years
    Canara Bank 13.65% 1-3 years
    Central Bank 12.70% 1-3 years
    Dena Bank 13 % to 14% 1-3 years
    IDBI Bank 12.75% to 13.75% 1-5 years
    Indian Bank 12.65% to 13.65% 3 years
    Indian Overseas Bank 14.70% 1-5 years
    Karur Vysya Bank 13.9% to 16.40% 1-3 years
    Oriental Bank of Commerce 11.2% to 12.95% 1-5 years
    South Indian Bank 14.80% 1-4 years
    State Bank of Bikaner and Jaipur 13.2% to 14.2% 1-5 years
    State Bank of Hyderabad 15.25% to 15.75% 1-3 years
    State Bank of India 17.80% 1-4 years
    State Bank of Mysore 16.90% 1-3 years
    State Bank of Patiala 12.65% to 14.65% 1-5 years
    State Bank of Travancore 13.2% to 13.45% 1-5 years
    Tamilnad Mercantile Bank 14.4% to 16.4% 1-5 years
    UCO Bank 14.1% to 15.1% 4-5 years
    Union Bank of India 14.4% 1-5 years
    Vijaya Bank 13.7% 1-5 years

    Pradhan Mantri Mudra Yojana (Mudra Bank Loan) Interest rates

    Mudra Loan Interest rates

    The loans availed as per this scheme can be used for multiple purposes, like vehicle loans for automobiles meant for commercial purposes, business instalment loans that can aid in working capital financing / purchase of plant and machinery / renovating the infrastructure and/or business loans group and rural business credit.

    As per the financing options available under the scheme, the interest rates and loan limits vary to accommodate for the growth stage of the concerned enterprise availing the loan. As of November 2015, the applicable rates and limits are as follows

    1. Shishu – Loans up to a maximum of INR 50000 with rate of interest being 1% per month or 12% per annum. Repayment period up to 5 years
    2. Kishore – Loans exceeding INR 50000 up to INR 5 lakhs. The rate of interest will be dependent on the bank, in accordance with the schemes guidelines, keeping the credit history of the applicant in view. Repayment period based on the discretion of the bank
    3. Tarun – Loans exceeding INR 5 lakhs up to INR 10 lakhs. The rate of interest will be dependent on the bank, in accordance with the schemes guidelines, keeping the credit history of the applicant in view. Repayment period based on the discretion of the bank

    It is clear from the above mentioned points that the first option which caters to budding businesses has the most affordable rates and a fixed repayment term irrespective of the applicant’s or the business’ performance and history. The above, however are subject to change based on the scheme’s guidelines.

    A total of 27 Public Sector Banks, 17 Private Sector Banks, 31 Regional Rural Banks, 4 Co-operative banks, 36 Microfinance Institutions and 25 Non-Banking Financial Institutions have currently been selected to allow disbursement of this loan. 60% of the loans under this scheme are set to be offered through the ‘Shishu’ option and the rest 40% will be through the ‘Kishore’ and ‘Tarun’ schemes.

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    Highlights of the 2018-19 Union Budget on Pradhan Mantri Mudra Yojana (PMMY) or Mudra Loan

    The 2018-19 Union Budget meeting, led by the Finance Minister of India - Mr. Arun Jaitley, was commenced on 1 February 2018. To improve the financial condition of the country, this meeting focused on multiple sectors such as Micro, Small, and Medium Enterprises (MSME), agriculture and rural economy, infrastructure, finance, health, social security, education, tax, and others. The minister also concentrated on Mudra Loan offered under the Pradhan Mantri Mudra Yojana (PMMY).

    Since its inception in April 2015, a total of 10.38 crore self-employed individuals have availed the benefits of Mudra Loan by withdrawing a total credit of Rs.4.6 lakh crore. Out of the total number of loans, 76% of the loan accounts belong to women while over 56% belong to individuals who are SC, ST, or OBC. As the scheme has exceeded the targets set for all the previous years, the Government has decided to set the target for Mudra Loan during the upcoming financial year of 2018-19 at Rs.3,00,000 crore.

    The meeting also indicated that this year’s focus will be on Non-Bank Finance Companies (NBFC). When the MSMEs were struggling to receive financing after the country was hit by demonetisation, the NBFCs of India had stepped up to the task and provided financial aid to many. This not only helped MSMEs receive the monetary relief they required during a their time of need, but also proved that NBFCs are powerful vehicles that can be used to provide Mudra Loans to the masses. Keeping this in mind, the Finance Minister has also announced during the Union Budget that the eligibility criteria and refinancing policies for NBFCs will be reviewed to offer them better chances of providing loans.

    In addition to MSMEs, Mudra Loans of Rs.10 lakh can also be availed for non-agricultural activities or projects that are partially aligned to agriculture such as poultry, dairy, bee keeping, and many more. Depending on the growth stage and credit requirements of the micro, small, or medium enterprise, an entrepreneur can avail 3 types of loans under PMMY - Shishu, Kishor, and Tarun.

    Mudra Loan Interest rates FAQs

    1. What is the interest rate under the Mudra/PMMY Scheme?

      Interest rates are dynamic and decided by the lending institution under broad guidelines from the RBI so as to keep the products cost effective.

    2. What is the target audience for Mudra Scheme?

      Mudra is targeted at Non-Corporate Small Business (NCSB) segment that includes business entities such as small manufacturing plants, shopkeepers, service sector installations, vegetable/fruit vendors, repair shops, truck operators, food-service units, artisans, machine operators, small industries, food processors etc.

    3. 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.

    4. Are the loans subsidised by the central government?

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

    5. 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.

    6. 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.

    7. 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.

    8. 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.

    9. Is the PMMY Scheme active now?

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

    10. 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.

    Mudra Loan Interest rates Reviews

    • Citibank Personal Loan
      "Overall good"
      0.5 4.0/5 "Great!"
      I had no issues to get the personal loan with Citibank. The process was fine and I got the loan as needed. The customer support and response is fine as well as they contacted me on time. I am not sure on the rate of interest and processing charges.
      Was this review helpful? 2
      , new delhi
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Its Excellent"
      0.5 4.5/5 "Excellent!"
      Due to Bank Bazaar, only I got early salary short term plan. I had gone through the service provider and they helped me out. The online application is also good, the customer service is amazing. They call me back to back, if I busy they call me again to service.
      Was this review helpful? 2
      , ahmedabad
      Reviewed on Dec 07, 2018
    • Early Salary Personal Loan
      "Qucik Process"
      0.5 4.0/5 "Great!"
      The response is good even the loan was disbursed on time. I am very satisfied with the Early salary and the interest rate is good and enough. I took 10K with Early Salary and they have charged around Rs. 600 and I will pay the loan within one month.
      Was this review helpful? 1
      , ahmedabad
      Reviewed on Dec 07, 2018
    • Axis Bank Personal Loan
      "Its Average"
      0.5 5.0/5 "Blown Away!"
      In Axis bank the interest rate is high comparatively but its very easy to approach. I have been kept follow up with Axis but they taken some time process the personal loan application. I think they are charging some fee for per closuring the loan.
      Was this review helpful? 3
      , salem
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      It is the first time experience with the Bank bazaar where i am using it through the website where it is user friendly portal to access. The customer service is responsive also they explain the details of the loan. It is a very good portal to use.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      Bank Bazaar.com gave me good support, all the services are good,they call and intimated about the application. Recently I started using the application, the experience is really good. I came to the site through the promotion mail its fine.
      Was this review helpful? 2
      , vijayawada
      Reviewed on Dec 07, 2018
    • ICICI Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using with the personal loan from the ICICI BANK from past four years, there service is too good, they have charged me nominal rate of interest in this loan and even processing fee they have charged me was nominal ,the loan amount they have given me was sufficient.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 07, 2018
    • ICICI Bank Personal Loan
      "Charges should be reduced"
      0.5 5.0/5 "Blown Away!"
      The customer support is good, they gave good support, initially they told charges would be low, they finally they charged high for the amount of Rs.1.9 lakh, I think they taken Rs.2500 processing fee +7500 for some other charges. Finally I got Rs. 1.8 lakh in my hand.
      Was this review helpful? 1
      , vijayawada
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Easy to approch"
      0.5 4.0/5 "Great!"
      First time I have used this site to take the personal loan through online, the customer support is good. I came know about Bank Bazaar application through online, the website is very simple and to see all the offers in the market. I have been using mobile app is very easy.
      Was this review helpful? 2
      , mumbai
      Reviewed on Dec 07, 2018
    • IndusInd Bank Personal Loan
      "Interest rate should be reduced"
      0.5 4.0/5 "Great!"
      The response is very good for the loan amount they have gave me 14%, the loan amount approval is good. The processing fee is there for the amount Rs. 5 lakhs, the process is easy. Everything is good expect the interest rate it would be great if they reduce.
      Was this review helpful? 3
      , mumbai
      Reviewed on Dec 07, 2018
    • Kotak Personal Loan
      "Not user friendly loan"
      0.5 3.0/5 "Satisfactory"
      Got my personal loan 2.5 years ago. I have received the loan amount of 4.5 lakhs and they have provided me a interest rate of 17% which is quite high. Processing fee also high. I have paid the EMI of Rs. 12000 and i have selected the tenure period of 5 years. There is no partial payment and pre-closure facility available.
      Was this review helpful? 2
      , bangalore
      Reviewed on Dec 07, 2018
    • ICICI Bank Personal Loan
      "Not recommendable bank"
      0.5 4.0/5 "Great!"
      Bought my personal loan 2.5 years back. I have received the loan amount of Rs. 1.50 lakhs. They have given me a interest rate of 15% for this reason i have done a balance transfer to some other bank. I have paid the EMI of Rs. 5000 for the tenure period of 3 years. I have received the loan on time and the documentation process is quite easy.
      Was this review helpful? 2
      , bangalore
      Reviewed on Dec 07, 2018
    • IndusInd Bank Personal Loan
      "Not recommendable bank"
      0.5 5.0/5 "Blown Away!"
      I have purchased the loan 1.5 year back. They have offered me a interest rate of 11.28% and I'm happy about the interest rate. I have applied the amount of Rs. 7.8 lakhs and i have received the same. I got the loan on time. I pay the loan amount of Rs. 170000 approximately and i have chosen the tenure period of 5 years. They should inform the partial payment facility to the customer.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have been using BANK BAZAAR services for a while . The customer services is very responsible and helpful compare to others . I can compare every financial product from one website . So far it has been very good experience with bank bazaar . .
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Timely saving website"
      0.5 4.0/5 "Great!"
      The comparison option is good about the many banking information its helped to chose the best thing at one point.I got so many calls rather going to the bank. Bank Bazaar helped me to get call from the bank its made the process very faster. But value added response is not quick. I suggest it should be faster and the frequent call should be avoided.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 07, 2018
    • Early Salary Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I took a Personal Loan from the EARLY SALARY , the loan amount was satisfactory and it was a very fast service when I needed money. Overall it is very useful when you require money for emergency purposes. The tenure period is 1 month . Customer service is good and prompt .
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 07, 2018
    • Tata capital Personal Loan
      "Process should be simple"
      0.5 4.0/5 "Great!"
      The experience was average, because they were multiple call for the same request. I uploaded the documents then again collected physical documents again they came for signature. Finally they taken 15 days to sanction the loan and I felt the interest is higher.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      BANK BAZAAR provides the best service for me because i never expected this much soon i will receive my loan this much soon , i did not face any issue at the time of documentation . Website and is very easy to use with bank bazaar. Overall it has been good experience with bank bazaar .
      Was this review helpful? 2
      , mumbai
      Reviewed on Dec 07, 2018
    • Early Salary Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I took a Personal Loan from the EARLY SALARY , there are so much hidden charges they charge 3000 rs without my knowledge . The loan application process took few days . The loan amount was credited to my account with in no time. The interest rates are also nominal when compared to other banks in the market.
      Was this review helpful? 1
      , mumbai
      Reviewed on Dec 07, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      Bank Bazaar makes it easier to compare and choose various financial products online. Customer service is good they are very prompt . Website is very easy to use of bank bazaar . So far it was good experience . Mobile application also good to use . My loan experience is good .
      Was this review helpful? 3
      , jodhpur
      Reviewed on Dec 07, 2018
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