Current Mudra Loan Interest Rates in India – Jan 2022
|Lenders||Interest Rate||Processing Fee||Maximum Loan Amount||Re-payment Tenure|
|Bajaj Finserv||1% – 12% per annum||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|Lendingkart Finance||Up to 1% per month||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|Flexiloans||1% per month onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|UCO Bank||8.85% onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|Union Bank of India||7.60% onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|Bank of Baroda||8.15% + BSS onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|PSB Loans in 59 minutes||8.50% onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|Punjab National Bank||9.60% onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|SBI||9.75% onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
|Saraswat Bank||11.65% onwards||As per applicant’s profile||Up to Rs. 10 lakh||Up to 5 years|
Note: The mentioned interest rates are subject to change and depend on the sole discretion of the bank, NBFC and RBI. Interest rate are updated as on Jan 2022.
The Mudra Loan Interest Rates vary from bank to bank and depend on the applicant’s profile and business requirements. To check the exact interest rate the applicant shall need to contact the respective bank or may check the banks’ official website.
Must Read: What are the documents required for applying Mudra loan?
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MUDRA Loan is funding support offered under Pradhan Mantri Mudra Yojana (PMMY) to promote the MSME sector in India. The Mudra Yojana is categorised into 3 loan schemes named Shishu, Kishor, and Tarun. There are no minimum loan amount criteria, however, the maximum loan amount offered is up to Rs. 10 lakh. The repayment tenure of each loan is up to 5 years, wherein no collateral or security is required by the lender.
The interest rates of MUDRA loans shall vary from bank to bank depending on the category of loans and business requirements. MUDRA categorises these loans into three segments viz., Shishu, Kishor, and Tarun. The interest rates that banks offer are meant to suit each segment based on their needs and prescribed guidelines.
The three loan schemes under Mudra Yojana along with the loan amount offered are as follows:
|Shishu||Up to Rs. 50,000||This stage caters to the needs of entrepreneurs who are yet to start their businesses or whose enterprises are at an early stage.|
|Kishor||From Rs. 50,001 – Rs. 5,00,000||This stage helps the businesspersons who have started their business but are in a need of funds to sustain it in the market. This segment is also for those entrepreneurs who need a larger sum of money than what Shishu loan offers for starting their businesses.|
|Tarun||From Rs. 5,00,001 – Rs. 10,00,000||This is the highest level of the scheme and an entrepreneur is eligible for a loan from Rs. 5 lakh and up to Rs. 10 lakh. These loans are meant for business owners who need to set up a large business or need funds to expand the enterprise.|
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Schemes offered under MUDRA Yojana
The MUDRA Loan Yojana has a variety of sub-schemes designed for specific business needs. These schemes include:
- Credit for Micro Enterprises: This is in line with the most basic motive of the scheme. It focuses on maximizing the involvement of the population so that there can be more benefits and an increasing number of beneficiaries. The segment of the population which is involved in land transport, food production, textile, and community services can take advantage of the scheme and start their own small business unit to become self-dependent
- Mahila Udyami Scheme: This sub-scheme has been designed to keep women entrepreneurs in mind. It has an objective to encourage women, groups of women, joint liability groups, and self-help groups of women to set up micro-business entities. Under this scheme, special interest concessions are also offered to enterprising businesswomen
- Refinance Scheme for Banks: The MUDRA Yojana also refinances loan amounts of up to Rs. 10 lakh extended by the banks to borrowers. However, refinancing can only be provided for manufacturing and service sector micro and small enterprises. As per RBI guidelines for the scheme, scheduled commercial banks have to lend to the ultimate borrowers at their base rate to avail MUDRA refinance. Also, regional, rural and cooperative banks need to cap their MUDRA loan interest rates margins at 3.5% above their loan refinance rate
- Micro Credit Scheme: The micro-credit scheme focuses on Micro Finance Institutions (MFIs) and provides them the financial support they need. The scheme makes funds available to individuals, groups of individuals, and micro-business entities
- MUDRA Card: Mudra card is a debit card issued to the Mudra account holders for multiple withdrawals and credits. The working capital limit can be utilized efficiently by using the Mudra card. This debit card is issued on the RuPay platform that provides hassle-free credit to its customers
- Credit Guarantee Fund: Credit Guarantee Fund for Micro Units (CGFMU) is a fund being managed by National Credit Guarantee Trustee Company Ltd. (NCGTC), an agency promoted by the Govt of India. Under this fund, all eligible microloans sanctioned under Mudra Yojana are covered under this guarantee fund. This fund provides relief to banks and NBFCs regarding risks related to collateral or security
- Equipment Finance Scheme: This scheme is designed to help micro-enterprises in their expansions. With the help of this scheme, qualified equipment can be purchased through the finance of up to Rs. 10 lakh
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How to Get a Mudra Loan at Low-Interest Rate?
It’s simple to get a mudra loan at a low interest rate. You just need to follow the below-mentioned suggestions:
- Check and compare from loan deals offered by various banks offering Mudra loan
- Applicant’s with good financial history and repayment capability shall get lower interest rates
- The desired loan amount also defines the offered interest rates
- Business vintage shall get preference over startups
- Higher the annual turnover & volume; lower shall be the offered interest rate
- Applicants with no previous loan defaults will have an advantage
- Nature of business will define the interest rates
- Businesses engaged in lesser risk shall avail loans at lower interest rates
Mudra loans under PMMY are offered by various financial institutions, such as SBI, HDFC Bank, ICICI Bank, PNB, Axis Bank, Bajaj Finserv, Lendingkart Finance, Bank of Baroda, Canara Bank, and many more financial institutions. Mudra loans are collateral-free loan offers at competitive interest rates with Nil to nominal processing fees, along with no foreclosure charges.