Current Mudra Loan Interest Rates in India – 2021
Lenders | Interest Rate | Processing Fee | Maximum Loan Amount | Re-payment Tenure |
SBI | 9.75% onwards | Nil, for Shishu scheme | Up to Rs. 10 lakh | Up to 5 years |
Oriental Bank of Commerce | 8.15% onwards | As per applicant’s profile | Up to Rs. 10 lakh | Up to 5 years |
Bank of Baroda | 9.65% onwards + SP (Strategic Premium) | Nil | Up to Rs. 10 lakh | Up to 5 years |
Corporation Bank | 9.35% onwards | As per applicant’s profile | Up to Rs. 10 lakh | Up to 7 years |
Bank of Maharashtra | 8.55% onwards | As per applicant’s profile | Up to Rs. 10 lakh | Up to 5 years |
Andhra Bank | 8.20% 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 |
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank and RBI. GST and service tax shall be levied extra on the mentioned charges.
The Mudra Loan Interest Rates vary from bank to bank and depends 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 from the banks’ official website.
Must Read: What are the documents required for applying Mudra loan?

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MUDRA Loan is a funding support offered under Pradhan Mantri Mudra Yojana (PMMY) to promote MSME sector in India. The Mudra Yojana is categorised into 3 loan schemes named as Shishu, Kishor, and Tarun. There is 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 or financial institution. Below mentioned are the interest rates offered by popular banks offering Mudra loan or a type of business loan:
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, as mentioned earlier, 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 loan amount offered are as follows:
Types | Loan Amount | Details |
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 Loan 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 maximising 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 Uddyami Scheme: This sub-scheme has been designed keeping women entrepreneurs in mind. It has an objective to encourage women, groups of women, joint liability groups, and self-help groups of women to setting 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, group of individuals, and micro business entities
- MUDRA Card: This extraordinary product helps create easy credit accessibility and provides exceptional flexibility to the cardholder. It can be used as a debit card for the assigned overdraft limit for ATM withdrawals
- Credit Guarantee Fund: The credit guarantee fund has been created to reduce the risk for lending institutions. It can provide loans worth more than Rs. 1 lakh crores to manage the risk of lending institutions
- 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 finance. It can greatly help organisations in increasing their production and expand their horizons of profitability and sustainability as well
Also Know: What is the process and requirement of taking a loan from Mudra Bank?

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How to Calculate Mudra Loan EMI?
To calculate Mudra loan EMI, you need to enter few details in the EMI calculator on the selected bank’s official website, eligible to offer Mudra loan as directed by RBI:
Step 1: Select the total loan amount from the slider or type in the required loan amount. Maximum up to Rs. 10 lakh under Tarun Category.
Step 2: Enter the interest rate offered by the respective bank
Step 3: Mention the desired repayment tenure from 12 months to 5 years
Also Know: How to calculate interest rates on a business loan?
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
- Business vintage shall get preference over startups
- Higher the annual turnover, low might be the interest rate
- Applicants with no previous loan defaults will be an advantage
- Nature of business will define the interest rates
FAQs
Some of the frequently asked questions regarding MUDRA Loan Scheme are explained here.
Q. What is the maximum loan amount that can I avail from Mudra Loan?
A. The maximum loan amount of Rs. 10 lakh can be availed under the category named as ‘Tarun’ and can be used for business expansion or related purposes.
Q. What is the repayment period of the Mudra loan?
A. The repayment period of Mudra loan goes maximum up to 5 years.
Q. Do I need to deposit any collateral to get Mudra loan sanctioned?
A. No, there is no need to provide any collateral to any bank and bank will also not ask you to provide any collateral.
Q. Can a college graduate apply for a MUDRA loan?
A. Yes, any college graduate (minimum 18 years) who wishes to set up his/her own business and requires finance can apply for a MUDRA loan.
Q. I am 19 years old, can I get Mudra loan to start my own business?
A. Yes, any individual who is more than 18 years is eligible to take Mudra loan for startup businesses in trading, services or manufacturing sectors.
Q. What are the roles and responsibilities of MUDRA?
A. MUDRA is responsible for refinancing all the last mile financiers including private & public sector banks, co-operative societies, small finance banks, scheduled commercial banks, and regional rural banks that lend to small and micro entities engaged in manufacturing, trading, and services sectors.
Q. What are the relief measures introduced by Government of India under Atmanirbhar Bharat Abhiyan 2020?
A. As per ‘Atmanirbhar Bharat Abhiyan’ or ‘Self-reliant India Scheme’, Government of India introduced various benefits under MUDRA Shishu Category
Relief of Rs. 1500 crore to MUDRA Shishu loan borrowers
Rs. 1500 crore Interest subsidy for MUDRA ‘Shishu’ Loan category
Government of India shall provide Interest discount of 2% for fast recipients for a period of 12 months