Mudra loan categories
| Category | Loan amount | Who it's for |
|---|---|---|
| Shishu | Up to ₹50,000 | For starting or very small businesses. |
| Kishore | ₹50,000 – ₹5,00,000 | For businesses that are running and want to grow. |
| Tarun | ₹5,00,000 – ₹10,00,000 | For established businesses expanding further. |
| Tarun Plus | ₹10,00,000 – ₹20,00,000 | Only for borrowers who have taken and fully repaid an earlier Tarun loan. |
The scheme sets only these categories. The interest rate, fees and tenure come from your lender, so the same Mudra loan can cost very different amounts at different lenders.
Worked example: the same ₹3 lakh Kishore loan from three lenders
₹3 lakh for 3 years, at illustrative rates and fees:
| Lender | EMI | Interest + fees | APR |
|---|---|---|---|
| Public sector bank (10%, no fee) | ₹9,680 | ₹48,487 | 10% |
| Small finance bank (14%, 1% fee) | ₹10,253 | ₹72,661 | 14.84% |
| NBFC or microfinance lender (20%, 1.5% fee) | ₹11,149 | ₹1,06,678 | 21.31% |
Borrowing the same ₹3 lakh from the NBFC instead of the bank costs about ₹58,191 more. It is worth asking your own bank branch first, and comparing written offers with the loan offer comparison.
Assumptions
- Equal monthly EMIs at a fixed rate for the whole tenure, on the reducing balance.
- The processing fee is paid upfront and included in the APR; other charges such as stamp duty or insurance aren't included.
- If a lender quotes a flat rate, convert it first with the flat vs reducing rate calculator.
- Categories and limits are from the scheme as revised on 24 October 2024; see mudra.org.in and confirm current terms with your lender.
Frequently asked questions
What is a Mudra loan?
A loan under the Pradhan Mantri Mudra Yojana (PMMY) for non-corporate, non-farm small and micro businesses: shops, small manufacturers, traders, service providers and the like. It is given by banks, regional rural banks, small finance banks, cooperative banks, NBFCs and microfinance institutions. MUDRA itself doesn't lend to borrowers; it refinances these lenders.
What are the Mudra loan categories and limits?
Shishu: up to ₹50,000. Kishore: above ₹50,000 up to ₹5 lakh. Tarun: above ₹5 lakh up to ₹10 lakh. Tarun Plus: above ₹10 lakh up to ₹20 lakh, only for borrowers who have taken and fully repaid an earlier Tarun loan. Tarun Plus and the ₹20 lakh limit apply from 24 October 2024.
What is the interest rate on a Mudra loan?
There is no single Mudra rate. Each lender sets its own rate within RBI's rules, based on your profile and the loan. Public sector banks and regional rural banks are usually cheaper than NBFCs and microfinance lenders. Ask for the Key Facts Statement, which must show the rate, all fees and the APR.
Do I need collateral or a guarantor for a Mudra loan?
Mudra loans are collateral-free. Loans up to ₹20 lakh are covered by the Credit Guarantee Fund for Micro Units (CGFMU), which protects the lender instead. A lender may still ask for assets bought with the loan to be hypothecated to it.
Is there a processing fee on a Mudra loan?
It depends on the lender. Many public sector banks charge little or nothing, especially on small loans; others charge a percentage of the loan plus 18% GST. Enter the fee in the calculator to see its effect on the true cost (APR).
How long can I take to repay a Mudra loan?
Most Mudra term loans are repaid over 12 months to 5 years. Some lenders allow longer at their discretion. A longer tenure lowers the EMI but raises the total interest.
What is a Mudra card?
A RuPay debit card linked to a Mudra working capital limit. You draw money as you need it and pay interest only on what you use, so it doesn't have a fixed EMI like a term loan. This calculator is for term loans with EMIs.
How do I apply, and do I need an agent?
Apply at a bank or lender branch, or online through the government's Udyamimitra portal (udyamimitra.in). MUDRA says it has no agents or middlemen. Never pay anyone a fee to get a Mudra loan sanctioned.