Mudra Loan Interest Rate 2020 - All Banks Interest Rates
mudra loan interest rates

Mudra Loan Interest Rate 2020 – All Banks Interest Rates

Pradhan Mantri MUDRA Yojana (PMMY) is a government initiative to facilitate the non-corporate, non-farm small or micro-enterprises with easy loan facilities. 

You can apply with commercial banks, RRBs, small finance banks, MFIs and NBFCs for the MUDRA loan in India. 

Main benefits of PM MUDRA Yojana

  • No collateral security is required.
  • The repayment of a loan in a maximum period is 5 years but varies bank to bank
  • You can use the MUDRA card for working capital withdrawals.

Types of loans under PM Mudra Yojana

  • Shishu – Loans up to Rs. 50,000 for small business or extension (easy approval)
  • Kishor – Loans above Rs. 50,000 and up to Rs. 5 lakh
  • Tarun – Loans above Rs. 5 lakh to Rs. 10 lakh

Current Mudra Loan Interest Rate

Pradhan mantri mudra yojana interest rate is 1% per month or 12% per year for the loans under the Shishu loan category. 

For Tarun and Kishore categories, the banks have the discretion to decide the mudra loan interest rate.

Banks can decide Mudra loan interest rates based on the credit history of the applicant. 

Mudra Loan Lowest Interest Rate

Punjab National Bank

Punjab National bank offers the lowest interest rates on Mudra loans. You can get the Mudra loan as low as 8% interest rates from the PNB bank. 

Another benefit is that PNB has a wider network in urban as well as rural parts of the country. Anyone can easily approach the bank to get the loan sanctioned.

You have to repay the loan in a maximum of 5 years but bank has the authority to extend up to 7 years under certain conditions.

Details of Mudra loan as below.

PNB Mudra Loan Interest Rate – 8.00% to 10.30%

  • Processing fee – as per bank guidelines
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years (can be extended to 7 years)

Pradhan Mantri Mudra Yojana Interest Rate 

Here are the details of different banks’ mudra loan interest rates. You can compare the banks and analyse before applying for mudra loan. 

#1. Mudra Loan Interest Rate SBI

State Bank of India has recently cut MCLR rates and now it has low-interest rates as compared to last year. Pradhan Mantri Mudra Yojana interest rates are revised from 1 April 2020.

SBI Mudra Loan Interest Rate – 9.65% onwards

  • Processing fee – Nil for Shishu, 0.5% of the loan amount for others
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

#2. UCO Bank Mudra Loan Interest Rate

UCO Bank offers an aggressive Pradhan Mantri Mudra Yojana interest rate that you can repay in up to 5 years. The maximum loan amount is capped to Rs. 10 lakh.

UCO Mudra Loan Interest Rate – 8.85% onwards

  • Processing fee – Nil for Shishu, 0.5% of the loan amount for others
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – Up to 7 years

#3. Bank Of Baroda Mudra Loan Interest Rate

Bank of Baroda offers interest rates on Mudra loans that range from 8.30% to 10.30% and zero processing fee. You can check out the details below.

BOB Mudra Loan Interest Rate – 8.40% to 9.25%

  • Processing fee – Nil
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

#4. Union Bank Mudra Loan Interest Rate

Union Bank of India or simply Union Bank doesn’t take any processing fee on applying for Mudra loan.

Union Bank Mudra Loan Interest Rate – 10.35% onwards.

  • Processing fee – Nil
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

You would like to read- Personal loan interest rates in India.

#5. HDFC Bank Mudra Loan Interest Rate

HDFC bank offers up to Rs. 10 lakh loan under PM Mudra Yojana. The interest rate and other important terms are as below.

HDFC Mudra Loan Interest Rate – 10% to 19.70%

  • Processing fee – Up to 1.5% of loan amount
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

#6. Mudra Loan Interest Rate ICICI Bank 

ICICI bank offers a collateral-free PM Mudra loan up to Rs. 10 lakh as described in the list below.

ICICI Mudra Loan Interest Rate – 10% to 20%

  • Processing fee – Up to 2.2% of the loan amount
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

#7. Bank of Maharashtra Mudra Loan Interest Rate

You get up to 10 lakh as a mudra loan for your business. You have to pay interest, processing fee against mudra loan.

Bank of Maharashtra Mudra Loan Interest Rate – 9.25% to 10.50%

  • Processing fee – Up to 1.5% of the loan amount
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

#8. Corporation Bank Mudra Loan Interest Rate

Corporation bank offers a collateral-free PM Mudra loan up to Rs. 10 lakh as described in the list below.

Corporation Bank Mudra Loan Interest Rate – 9.70% onwards

  • Processing fee – Up to 1.5% of the loan amount
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – 5 years

#9. Bank Of India Mudra Loan Interest Rate

Bank of India offers low-interest rates on Mudra loans that start from 8.35%. Below are the details of Mudra loan .

Bank of India Mudra Loan Interest Rate – 8.35% onwards

  • Processing fee – As per bank guidelines
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – up to 7 years

#10. Bajaj Finserv Mudra Loan Interest Rate

Bajaj Finserv is an NBFC company that offers low-interest rates on Mudra loans.

Bajaj Finserv Mudra Loan Interest Rate – 8.40% to 12.45%.

  • Processing fee – Nil for Shishu and Kishore loan, 0.5% of the loan amount for Tarun loan
  • Maximum Loan Amount – Up to 10 lakh
  • Tenure – up to 7 years

Pradhan Mantri Mudra Loan Limits 

  • Shishu – Loans limit is 50,000 with the rate of interest is 1% per month or 12% per annum. The repayment period for the Shishu loan is up to 5 years.  
  • Kishore – Loan limit is between Rs. 50,000 up to Rs. 5,00,000. The interest rate and loan repayment period are totally on the bank’s discretion.
  • Tarun – Loan limit is Rs.  5,00,000 up to Rs. 10,00,000. The interest rate and loan repayment period will be decided by the bank.

Mudra Loan Interest Calculator

Let’s discuss how interest on mudra loans is calculated.

M = P x R x (1+R)^n / {(1+R)^n – 1}

Where, 

P – Principal loan amount 

R – Interest rate

n – tenure

M –  Mudra loan repayment amount

For example, you apply for a mudra loan of Rs. 1 lakh at interest rate of 9% for 5 years. Let’s calculate the interest.

M = 100000 x 9 x (1+9)^5/{(1+9)^5-1} = 124550

Interest payable – Rs. 24,550.

Eligibility for Mudra Loan

Any Indian citizen who seeks funds to start a new business is eligible for Mudra loan. Not only for a new business, if you have extension plans for your current business in the segments mentioned below can apply for Mudra loan.

  • Manufacturing
  • Processing
  • Trading
  • Service sector 

You can apply for Mudra loan if you need a loan of less than Rs.10 lakh. 

You can approach either a Bank, MFI, or NBFC for availing collateral-free loans under Pradhan Mantri Mudra Yojana (PMMY). 

Also read – Pradhan Mantri Awas Yojana – A complete guide

FAQs

#1. What Benefits A Woman Can Avail Under Mudra Loan?

A woman entrepreneur can avail all the benefits available under Mudra  yojana with an additional rebate of 0.25% when you avail a loan.

#2. I Am A Graduate. Can I Get A Mudra Loan?

Yes if you want to start your own business, you can apply for Mudra loan in the range of Rs. 50,000 up to Rs. 10,00,000.

#3. I Want To Install A New Printing Press At My Shop. Can I Avail Mudra Loan?

Yes, you can take the Mudra loan up to Rs. 5,00,00 under Tarun yojana to expand your running business.

#4. Do I Need To Have A Pan Card If I Want To Avail A Mudra Loan?

No. PAN card is no mandatory to get a Mudra Loan. But some banks may ask for your  PAN card for KYC purposes.

#5. What Sectors Are Covered Under MUDRA Loans?

Transport vehicle- Loan to purchase of transport vehicles for transportation of goods and passengers such as auto-rickshaws, small goods transport vehicles, 3 wheelers, e-rickshaws, and taxis.

Community service activities – Mudra loans for salons, beauty parlors, gyms, boutiques, dry cleaning, cycle or motorcycle repair shops, Printing Press and Photocopying Facilities, Medicine Shops, Courier Agents, and similar services.

Food products sector – Mudra loan covers papad making, achaar making, jam/jelly making, agricultural produce preservation at the rural level, sweet shops, small eating joints, ice and ice cream making units, and bakery units.

Textile products sector- Handloom, khadi activity, embroidery work, cloth dyeing and printing, apparel design, knitting, cotton ginning, stitching and other textile non-garment products such as bags, vehicle accessories, and furnishing accessories.

Business loans for traders and shopkeepers – Lending support to individuals for running their shops and non-farm income-generating activities like service enterprises with a beneficiary loan size of up to 10 lakh per enterprise.

Equipment Finance Scheme for Micro Units – Setting up micro-enterprises by purchasing necessary machinery or different types of equipment up to 10 lakh as a loan amount.

Activities allied to agriculture – ‘Activities allied to agriculture’ are pisciculture, beekeeping, poultry,  diary, fishery, food & agro-processing services.

Note: PMMY doesn’t cover crop loans, loans for land improvements such as canal, irrigation, and wells.

Final Words 

The government has kept the process of Mudra loan very simple. You can visit your nearest bank to apply for the mudra loan. 

You can also apply for Mudra loan online and you get a hand holding agency to assist you in the lending process.

If you have any queries regarding Mudra loan, do let me know in the comments.

Leave a Comment

Your email address will not be published.

Scroll to Top