A Guide to Pradhan Mantri Mudra Loan Interest Rates

Mudra loans are offered by the Pradhan Mantri Mudra Yojana (PMMY). Micro-Units Development and Refinance Agency is referred to as Mudra. Under this program, borrowers may apply for business loans between Rs.50,000 and Rs.10 Lakh. 

Mudra Loan Interest Rates by Various Banks

Mudra loan interest banks offered by various banks are mentioned in the table below:

Bank Name Interest Rates Processing Charges

State Bank of India

One-Year MCLR + 2.75%

Nil up to Rs.50,000; 0.35% of the loan amount + Taxes for Rs.50,000 to Rs.10 Lakh

UCO Bank

Starts at 8.85% p.a. 

Nil up to Rs.5Lakh; Rs.357 per Lakh for Rs.5 Lakh to Rs.10 Lakh

Union Bank of India

EBLR + 1.75% for loans up to Rs.50,000; EBLR + 1.75% for loans above Rs.50,000 to R.2 Lakh, EBLR + 2.75% for loans above Rs.2 Lakh



RLLR + 0.35% onwards

Nil for loan upto Rs. 5 Lakh; up to 0.50% for loans above Rs.5 Lakh

Bank of Baroda

Linked to MCLR


Indian Oversees Bank

Please get in touch with the bank for more information


Please get in touch with the bank for more information

Central Bank

Linked to RBLR

Please get in touch with the bank for more information

Bank of India

Please get in touch with the bank for more information

Canara Bank

Linked to RLLR

Please get in touch with the bank for more information

Indian Bank

Please get in touch with the bank for more information

Bank of Maharashtra

Linked to RLLR

Please get in touch with the bank for more information

Note: Rates are mentioned as of 24th May 2024 and can be revised by the bank without any notice. Please check with the bank before applying for a loan.

Types of Mudra Loan

There are 3 types of Mudra loans and the loan amount offered depends on the type of the loan. Take a look at the following table for details: 

Type of loan Loan Amount


Up to Rs.50,000


Rs.50,000 to Rs.5 Lakh


Rs.5 Lakh to Rs.10 Lakh

Factors Affecting MUDRA Loan Interest Rates

Mudra loan interest rates are not fixed and vary based on individual cases. Here are some factors that may affect interest rates of Mudra loans -

Tips to Get MUDRA Loans at Affordable Interest Rates

Now that you know what affects the interest rates when you apply for a Mudra loan, here are some tips to get loans at affordable rates -


According to a 2018 analysis by The Economic Times, India had over 51 million MSME units that contributed to roughly 37% of the nation's GDP and 43% of its exports. Despite the important role that small firms play in economic growth, MSMEs have to deal with several difficulties, including a lack of funding for working capital and raw materials, obsolete technology, and a labor shortage.

The Pradhan Mantri Mudra Yojana was introduced by the government on April 8, 2015, to assist small enterprises with financial issues. Mudra provides business loans with payback tenures ranging from 1 to 5 years. 

The amount of funding is determined by the type of loan that is available, and it is charged at the Pradhan Mantri Mudra Yojana interest rate that is currently in effect.

Mudra Loan Related FAQs

Mudra loans are unsecured because no collateral is necessary to obtain one. Because each organization determines its own risk factor and sets rates accordingly, interest rates differ from institution to institution.

A Mudra loan's processing period varies depending on the financier. The amount of time required for you to get the loan disbursement will depend on the financial institution you choose. Businesses can request an advance of up to Rs. 10 lakh without putting up any collateral by having the required paperwork on hand.

The application forms are available online at the Mudra website or from any of the intermediaries.

The initial category of Shishu Loans requires the completion and submission of a one-page application form. Applicants must complete a 3-page application form for the Kishor and Tarun loan categories.

The intermediary lending institution determines the terms and conditions of repayment in accordance with its rules while taking the business's cash flow into account.

Yes, the program has been running nationwide since April 8, 2015.

When the advance amount exceeds Rs. 2 lakh, an ITR, or income tax return, is one of the crucial documents needed to be eligible for a Mudra loan. A candidate will also require additional financial records, such as anticipated balance sheets for the next two years and balance sheets for the previous three years that have been audited by a CA.

Yes, Mudra loans are offered to new companies and startups. The commercial endeavors need only be related to the manufacturing, non-agricultural, or trading sectors. A prospective applicant must submit the business plan with the application form in order to be considered for the loan. Thus, it aids aspiring business owners in realizing their goals.

The Mudra loan program is government-funded, so having a high CIBIL score is not a necessity. As a result, both individuals and non-individuals who match the requirements of the scheme's eligibility requirements—which do not need applicants to have a minimum CIBIL score—can apply for this loan. However, having a good CIBIL score will help you negotiate better loan terms with lenders.

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