img

Home > Mudra Loan Interest Rate

Mudra Loan Interest Rate

MUDRA, which stands for Micro Units Development and Refinance Agency, is a refinancing institution under the Pradhan Mantri MUDRA Yojana (PMMY). To develop a value-based entrepreneurial culture, PM Narendra Modi launched the PMMY scheme on 8th April 2015.


What is PMMY?

Under the PMMY scheme, loans up to Rs 10 lakh are provided to non-farm small/micro enterprises and non-corporates for generating income and employment in Manufacturing, Retail, Services, and Agricultural Allied activities. These loans are known as Mudra Loans. Even though MUDRA is a refinance institution, it does not provide lending facilities directly to the borrowers. Instead, Mudra Loans can be availed by the borrowers from nearby branch offices of any bank, NBFC, MFI, etc. Borrowers can also make an online application to avail Mudra loans.


MUDRA Yojana Loan Interest Rate

FlexiLoans provides standard Mudra loan interest rates that are different for the various loans available under this scheme. Interest rates at FlexiLoans start from 1%. However, it may vary depending upon the profile of the entrepreneur and business. Compared to regular unsecured business loans, Mudra Loan interest rates are much more beneficial to entrepreneurs.


Types of Mudra Loans and Loan Limits Under Mudra Yojana

Mudra Loan Scheme has created three products: Shishu, Kishore and Tarun, each representing the life cycle stage at which the business is operating.

  • Shishu Mudra Yojana

As the name suggests, ‘Shishu’ is for financing the entrepreneurs who are about to start their businesses or are at their very early stage of operations. The amount of funding that can be raised under this product is from Rs 0-50,000. The maximum tenure of a loan under this stage is 5 years.

  • Kishore Mudra Yojana

‘Kishore’ provides funding to existing entrepreneurs who require funds to sustain themselves in the marketplace. Here, the amount of loan that can be availed ranges between Rs 50,001-5,00,000. The tenure of the loan may vary according to the lender.

  • Tarun Mudra Yojana

‘Tarun’ offers borrowers a finance facility within the range of Rs 5,00,001-10,00,000. This product is particularly for businesses that are looking towards expanding their operation to a larger scale.


Why Mudra Loan?

Mudra loans are specifically provided to cater to the needs of businesses and entrepreneurs who are at their early stage. Unsecured in nature, Mudra loans do not require collateral or security for availing the loan. Interest rates for Mudra Loans vary depending upon the lenders.

At FlexiLoans, the Mudra Loans facility is available with an interest rate of 1% per month onwards. However, it depends upon various factors like loan amount, tenure, and eligibility. The maximum amount of loan is up to Rs 10 lakh with a repayment tenure of 5 years. Mudra Loans are offered in different categories, including invoice financing, working capital loan, line of credit, and merchant cash advance. These loans do not have any collateral to be placed against the loan amount, making them perfect for small and micro-companies. At FlexiLoans, borrowers do not have to pay processing charges for these loans. The credit availed through these loans can effectively be used for overdraft facilities and term business loans.


Mudra Loan Eligibility Criteria

Minimum Business Vintage 1 year
Monthly Business Sales Minimum 2,00,000

Documents Required for Mudra Loans

Personal KYC PAN Card
Residential Address Proof (Any One) Aadhar Card | Passport | Ration Card | Voter ID | Driving License | Rent Agreement
Business KYC (Any One) Business PAN Card | Shops & Establishment Certificate | GST Registration Certificate
Banking Bank statements of last 6 months from current account

Mudra Loan Calculator

For the ones looking for availing Mudra loans, Mudra Loan Interest Calculator can be used to determine the monthly instalments that need to be paid against the loan amount. This may help you plan your expenses and budget well in advance to not skip any instalment. Using this calculator is very easy. Just enter the loan amount, rate of interest and the tenure of the loan, and there you go! This will give you the exact amount that needs to be paid as Mudra Loan interest rate, your loan EMI and total repayment in the form of principal and interest.

The formula for calculating EMIs for business loan is E = P x r x (1+r)n / (1+r)n-1
where,
E = EMI amount
P = Principal amount
r = Rate of interest (per month)
n = Tenure of the loan (in months)

However, manually calculating EMIs using the above formula is prone to mistakes and time-consuming as well. Therefore, the EMI calculator eases EMI calculation - one just has to enter the loan amount, tenure of loan, and interest rate. Let’s understand with the help of an example:

Loan Amount: Rs 5,00,000
Tenure of Loan: 3 years
Rate of Interest: 10% p.a.
Therefore, tenure in months would be 36 months (3 years*12 months), and the rate of interest per month shall be 0.833% (10%/12months).

EMI using the above formula: E = 5,00,000 x 0.833/100 x (1+0.833/100)36 / [(1+0.833/100)36-1]
Therefore, the EMI will be Rs 16,134.


Activities Covered Under Mudra Loans

  • Transport Vehicle

Vehicles used for transportation of goods and passengers are covered here. This includes -
- Auto rickshaws
- Small goods transport vehicles
- Three-wheelers
- E-rickshaws
- Taxis
- Tractors/Tractor Trolleys/Power Tillers
- Two Wheelers used for commercial purposes
*Note that vehicles used only for commercial purposes are allowed under Mudra.

  • Social and Personal Services

Personal consumption services, like gyms, parlours, medicine shops, tailoring, dry cleaning shops, etc.

  • Food Sector

Basic food services, like food stalls, achaar-papad making, catering services, food preservation, cold storage, etc.

  • Textile

Embroidery, apparel designs, handlooms, power looms, knitting, job works, etc.

  • Traders and Shopkeepers

Individuals running shops for trading and business purposes

  • Equipment Finance Scheme

Setting up of micro-enterprises and purchasing machinery of value up to Rs 10 lakh


Frequently asked questions

What are the purposes for which I can get a loan via FlexiLoans?

FlexiLoans provide funds to cater to the needs of your business. With a simple and transparent Credit Evaluation procedure and basic documentation perusal, funds can easily be raised through FlexiLoans. This may include -
  • Manage short term cash flow gaps
  • Managing seasonal working capital requirements
  • Servicing regular working capital needs
  • Expanding your business

Why should I avail loan via FlexiLoans?

FlexiLoans ensures -
  • Quick credit assessment
  • Fast processing of loans
  • Fast disbursal
  • Best interest rates
  • Minimum charges and flexible terms

What documents are required to apply for a loan?

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

What are the charges other than interest charges?

Charges for processing the loan may vary from case to case. Generally, the following basic charges are levied:
  • Processing fees
  • Legal and documentation charges
  • Penal charges (in case of late payment or irregular payments)

What is the mode of repayment at FlexiLoans?

Loans are repaid in EMIs and can be directly debited from your bank account on EMI due date.

What is the lowest interest rate on a Mudra loan?

PMMY loan interest rate starts at 1% per month. However, this may vary depending upon eligibility, the amount borrowed, tenure of the loan, etc.

What is the requirement of security while availing of a Mudra Loan?

Mudra Loans are basically unsecured in nature. Therefore, there is no requirement of collateral or security for availing of Mudra Loans.

What is the amount and tenure of Mudra Loans?

Amount of loan will depend upon the life-cycle stage of your business, whether you are falling under Shishu, Kishore or Tarun Scheme. Tenure is generally for a maximum of 5 years.

FlexiLoans ensures -

  • Quick credit assessment
  • Fast processing of loans
  • Fast disbursal
  • Minimum charges and flexible terms

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

Charges for processing the loan may vary from case to case. Generally, the following basic charges are levied:

  • Processing fees
  • Legal and documentation charges
  • Penal charges (in case of late payment or irregular payments)

Loans are repaid in EMIs and can be directly debited from your bank account on EMI due date.

Mudra Loans are basically unsecured in nature. Therefore, there is no requirement of collateral or security for availing of Mudra Loans.

Interest rates start at as low as 1% per month. However, it may depend on various factors like your loan amount, tenure, eligibility, etc.

Amount of loan will depend upon the life-cycle stage of your business, whether you are falling under Shishu, Kishore or Tarun Scheme. Tenure is generally for a maximum of 5 years.