🏛️ Government Schemes

PM Mudra Loan 2026 — Apply Online, Eligibility and Interest Rates

By FinMandi TeamMay 2026✓ Updated May 2026

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Reviewed by FinMandi Research Team

Backed by 10+ years of banking experience · Verified May 2026

✓ RBI Sources ✓ Bank Verified ✓ May 2026

⚡ PM Mudra Loan Quick Facts

4 categories: Shishu (up to Rs 50K), Kishor (up to Rs 5L), Tarun (up to Rs 10L), Tarun Plus (up to Rs 20L)
No collateral required for loans up to Rs 10 lakh
Available at all PSU banks, private banks, RRBs, MFIs and NBFCs
Interest rate: 8.5% to 12% depending on bank and category
Apply online at mudra.org.in or directly at any bank branch
Mudra card issued — works like RuPay debit card for business expenses

4 Categories of Mudra Loan

Category	Loan Amount	For	Collateral
Shishu	Up to Rs 50,000	New businesses, micro units	None
Kishor	Rs 50,001 to Rs 5 lakh	Established small businesses	None
Tarun	Rs 5 lakh to Rs 10 lakh	Growing businesses	None required
Tarun Plus	Rs 10 lakh to Rs 20 lakh	Tarun borrowers with good track record	May be required

Who Can Apply for Mudra Loan?

Any Indian citizen with a non-farm business plan or existing business
Small shopkeepers, vegetable vendors, artisans, tailors, food stall owners
Truck/auto-rickshaw owners, small manufacturers
Self-help groups and joint liability groups
No minimum income requirement — bank assesses repayment capacity

Documents Required

Aadhaar card and PAN card
Passport-size photographs
Business address proof (utility bill, rent agreement)
Bank statements — last 6 months
Business plan or proof of existing business
Caste certificate if applicable (SC/ST/OBC categories)

How to Apply for Mudra Loan Online

Step 1: Visit mudra.org.in or your bank's website
Step 2: Select loan category (Shishu/Kishor/Tarun)
Step 3: Fill application form with business and personal details
Step 4: Upload documents — Aadhaar, PAN, bank statements
Step 5: Bank verifies and sanctions loan — typically 7-15 working days
Step 6: Mudra card issued along with loan disbursement

💡 Best banks for Mudra Loan: SBI, Bank of Baroda, PNB, Canara Bank process the highest number of Mudra loans. For faster approval, apply at your existing bank where you have a savings account. Having a good banking track record increases approval chances significantly.

Also read: All Government Schemes Guide · Best Personal Loan Rates · Improve CIBIL Score

Frequently Asked Questions

Mudra loan interest rates range from 8.5% to 12% p.a. depending on the bank and loan category. PSU banks like SBI and Bank of Baroda offer the lowest rates starting at 8.5% for Shishu category. The government does not fix a specific rate — each bank sets its own rate within RBI guidelines. There is no processing fee for Shishu loans; Kishor and Tarun may have minimal fees.

Yes. Mudra loans up to Rs 10 lakh (Shishu, Kishor and Tarun categories) do not require collateral. The loan is backed by the Credit Guarantee Fund for Micro Units (CGFMU) which provides guarantee to banks. Tarun Plus loans above Rs 10 lakh may require collateral at the bank's discretion. A good business plan and repayment capacity are the main criteria.

For Shishu loans (up to Rs 50,000), approval typically takes 7-10 working days if documents are complete. Kishor and Tarun loans take 15-30 working days due to additional verification. Online applications through bank's digital portal are faster. SIDBI's Udyamimitra portal (udyamimitra.in) also facilitates faster processing by connecting with multiple lenders simultaneously.

📋 Sources & Methodology

Data sourced from: RBI official website · Official bank websites · SEBI · IRDAI · Ministry of Finance press releases. Rates and data verified by FinMandi Research Team. Last verified: May 2026. FinMandi does not accept payment to rank any bank or product.

Disclaimer: All scheme details are as per official government sources updated May 2026. Eligibility and benefits may change. Always verify at official government portals before applying.