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Union Bank MUDRA STP

Union Bank of India offers MUDRA loan @ 9.75% p.a. onwards to micro enterprises engaged in trading, manufacturing and service sector including professionals under the PM MUDRA Yojana (PMMY). Prospective borrowers can avail Union Bank MUDRA loan for up to Rs. 20 lakh for repayment tenure of up to 7 years. Please Note: Union Bank of India is not a Paisabazaar partner. Offers would be from partner banks/NBFCs only.

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HDFC Bank
10 Second Disbursal*100% Digital Process*Quick Disbursal
Max. Loan Amt.Upto ₹25L
Rate of Interest9.99% - 12.5%
Tenure upto1-5 Years
Processing Fee₹ 6,500
Axis Bank
Low Processing fee
Max. Loan Amt.Upto ₹25L
Rate of Interest9.99% - 17.15%
Tenure uptoUpto 6 Years
Processing FeeUpto 2%
Kotak Mahindra Bank
Lowest Income requirement100% Digital Process*
Max. Loan Amt.Upto ₹25L
Rate of Interest9.98% - 17.2%
Tenure upto1-5 Years
Processing Fee1.1% - 1.5%

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How Can I Apply for a Business Loan Online?

Get up to ₹1 Crore in 5 Simple Steps

Step 1: Enter your mobile number in the application form.

Step 2: Enter OTP to verify your mobile number.

Step 3: Provide your personal details.

Step 4: Select a bank account for account aggregator consent.

Step 5: Compare offers and apply for the best-suited loan.

Union Bank MUDRA Loan at a Glance

Particulars Union Bank MUDRA 
Loan Amount From Rs. 10,000 to Rs. 20 lakh 
Facility Term Loan, Working Capital
Interest Rates 9.75% to 11.00%
Tenure
  • 5 years (for up to Rs. 5 lakh)
  • 7 years (for above Rs. 5 lakh to Rs. 20 lakh);
Processing Fees NIL

Interest Rates of Union Bank of India MUDRA Loan

Quantum Spread over EBLR Interest Rate(p.a)
From Rs. 10,000 & up to Rs. 50,000 EBLR + 1.50% 9.75%
Above Rs. 0.50 lakh & up to Rs. 2.00 lakh EBLR + 1.75% 10%
Above Rs. 2.00 lakh & up to Rs. 10.00 lakh EBLR + 2.75% 11%
Above Rs. 10.00 lakh & up to Rs. 20.00 lakh EBLR + 2.25% 10.5%

Interest Rates are updated as of 26th November, 2025

Swipe to see more table data

Fees & Charges of Union Bank MUDRA Loan

Fees and charges of Union Bank MUDRA loan STP (Straight through Processing):

For Union Bank Shishu Loan

Particulars Charges
Processing fees NIL
Digital convenience fee Rs. 950
Stamp charges Rs. 171
Insurance charges NIL

For Union Bank MUDRA - Kishor, Tarun & Tarun Plus

Particulars Charges
Processing NIL (Up to Rs. 10 lakh), Above Rs. 10 lakh as applicable
Digital Convenience fee Rs. 1,000 up to Rs. 10 lakh & Rs. 2000 above Rs. 10 lakh
Penal interest on delayed payments 2% p.a. for the duration of the instalments delayed
Penal interest on non-submission or delay in submission of stock statement 1% p.a.
Prepayment penalty NIL

Applicants should note that Union Bank provides a 3-day cooling-off or look-up period during which they will not be charged any penalty on loan prepayment.

Features of Union Bank MUDRA Loan

Loan Amount

Union Mudra loans are divided into the following four categories signifying the growth and funding needs of the beneficiary micro-entrepreneur:

Categorisation Loan Amount
Shishu Up to Rs. 50,000
Kishor Above Rs. 50,000 to Rs. 5 lakh
Tarun Above Rs. 5 lakh to Rs. 10 lakh
Tarun Plus Above Rs. 10 lakh to Rs. 20 lakh

As per the Budget announcement and the Official Gazette dated 24 October 2024, a new loan category, Tarun Plus, has been introduced. This category offers business loans ranging from above Rs. 10 lakh to Rs. 20 lakh to eligible individuals who have previously availed and successfully repaid loans under the Tarun category.

Loan Types:

  • Shishu: Working capital demand loan (WCDL)
  • Kishor: Working capital demand loan, Working capital (WC), Term loan (TL)
  • Tarun: Working capital, Term loan
  • Tarun Plus: Working capital, Term loan

Repayment (No prepayment penalty will be levied)

Category Repayment Terms
For WC Running account repayable on demand (Interest to be served as and when due).
WCDL To be repaid within a maximum period of 36 months in equated monthly installments.
TL > Rs. 2 lakh up to Rs. 5 lakh To be repaid within a maximum period of 60 months in equated monthly installments.
TL above Rs. 5 lakh To be repaid within a maximum period of 84 months in equated monthly installments.

Margin

  • Shishu MUDRA Loan: NIL
  • Kishor – 10%
  • Tarun – 25%
  • Tarun Plus- 25%

Security

  • Shishu MUDRA Loan: Hypothecation of book debts, stocks and other assets purchased out of the loan
  • Kishor: Hypothecation of stocks and book debts
  • Tarun: Hypothecation of assets purchased out of the bank’s finances is required as a security.

Guarantor

  • Shishu MUDRA Loan: NIL
  • Kishor, Tarun & Tarun Plus: Personal guarantee of all partners and promoters of the firm or LLPs is required. There is no need for a third-party guarantor.

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Eligibility Criteria for Union Bank MUDRA Loan

Union Bank of India offers MUDRA loans to micro-enterprises having business in trading, manufacturing and service sectors under the  PM MUDRA Yojana. Professionals like CA/CS/ICWA/Medical professionals/Architect, etc. can also avail Union Bank MUDRA loan.

Eligibility for Union Bank Shishu Loan

  • Applicant should be a micro-entrepreneur
  • Applicant should have a Union Bank of India (UBI) savings account
  • Applicant should have at least 6 months of banking relationship with UBI or with any other bank
  • The loan can be availed for income-generating activities only
  • Prospective borrowers should be at the business place while availing of a MUDRA loan
  • Applicant should not be a defaulter in any bank or any financial institution
  • The mobile number should be registered with the bank & UIDAI

Eligibility for Union Bank MUDRA - Kishor & Tarun STP

  • The promoter’s age should be between 21 to 65 years
  • The business entity should have a valid Udyam Registration Number (URN)
  • Eligible borrowers - Individuals, Partnership concerns (including LLPs) and Proprietorship classified under the category of micro-enterprise as per MSMED Act 2006
  • The business entity should have a minimum 6-month-old bank account with any scheduled commercial bank
  • The borrower, promoter, or sister concern name should not be in a defaulter list or CFR

Note: Tarun Plus is offered to those borrowers who have successful repaid their loans in the Tarun category.

Documents Required for availing Union Bank MUDRA Loan

For Union Bank Shishu MUDRA Loan

MUDRA loan applicants have to submit documents digitally on the NeSL platform through the Aadhaar-based OTP system. Business proof or establishment certificate, GST or Udyog Aadhaar are required to be uploaded.

Prospective borrowers should take note of the following while availing of a loan:

  • Mobile number is registered with Union Bank and UIDAI.
  • PAN, Aadhaar number and latest address are updated in the account

For Union Bank MUDRA - Kishor & Tarun STP

Eligible micro-entrepreneurs can visit the Union Bank of India branch for submission of required documents. Alternatively, eligible individuals or proprietorship concerns can also submit MUDRA loan documents online through the Aadhaar OTP-based system.

How Can I Apply for a Business Loan Online?

Get up to ₹1 Crore in 5 Simple Steps

Step 1: Enter your mobile number in the application form.

Step 2: Enter OTP to verify your mobile number.

Step 3: Provide your personal details.

Step 4: Select a bank account for account aggregator consent.

Step 5: Compare offers and apply for the best-suited loan.

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FAQs

The government has clarified that women of SC/ST and OBC category would be preferred while giving loans under this scheme.

Yes, all the banks such as all scheduled commercial banks in the public and private sector; Regional Rural Banks (RRBs); all Micro Finance Institutions (MFI); Small Business Finance companies and NBFCs and scheduled urban and state co-operatives.

Yes, the loans covered under MUDRA are collateral-free loans. However, assets created out of the bank loan to be charged with the bank.

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

Generally, it takes 7- 10 days for processing of lower amounts like Shishu loan. For other categories the processing time may vary from bank to bank.

To apply online for a Mudra loan, you can visit the official website of Union bank or visit the Jansamarth. 

To check your Mudra loan application status, you can either call the bank's toll-free number (1800-22-2244) or visit the nearest bank branch along with the loan details like reference number or loan application number.

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