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Embrace a new way of availing loan from the government

Minimal Documentation | Collateral Free Loan | Easy Repayment

Now meet your credit requirements easily with our mudra loans that come under the purview of Pradhan Mantri Mudra Yojna (PMMY). MUDRA, an abbreviation for Micro Units Development and Refinance Agency, is meant to support the growing activity in the non-farming and non-corporate sectors.

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Mudra Loan


Mudra Loan Interest Rate & Charges

Interest Rates: The Pradhan Mantri Mudra Yojana enables qualified applicants to borrow funds up to ₹10 Lakhs. The interest rate on the Mudra loan differs greatly given the applicant’s profile and business needs as well as the decision of the creditor or lending entity.

Processing Charges: No processing fee is levied on a Mudra loan for amounts up to ₹50,000. For amounts hovering between ₹50,001 and ₹10 Lakhs, an interest rate of 10% and a processing charge of 0.50% are put in place apart from the applicable GST.


Mudra Loan

Types of Mudra Loan Interest Rate

There are two kinds of Mudra Loan interest rates: fixed and floating.

Fixed Interest Rate

Here, the rate of interest charged on the Mudra Loan amount will remain constant throughout the loan repayment period. You know your Mudra Loan EMI obligation at the start of the tenor, allowing you to plan your monthly budget accordingly.

Mudra Loan
Mudra Loan

Floating Interest Rate

Here, Mudra Loan interest rates could change depending on changes to the Marginal Cost of Lending Rate (MCLR), which is the base rate set for banks by the RBI. With changes in MCLR, the interest rate on loans also gets revised. With a lower interest rate, the repayment amount also reduces. On the other hand, if the interest rates increase, your EMI obligation will also increase. A floating Mudra Loan interest rate makes it difficult for you to ascertain your monthly financial obligation.

Mudra Loan Interest Calculation Method

There are two methods to calculate interest: flat rate method and the reducing balance method.

In the flat interest rate method, the interest rate is based on the complete loan amount you pay during the repayment period. In case of reducing the balance method, the rate of interest on the Mudra Loan will be considered and calculated on the basis of the outstanding loan amount.

Flat Interest Rate Calculation

EMI = (principal + total interest payable) / loan tenure in months i.e. total interest payable = P x r x n/100

Where, ‘P’ is the principal loan amount, ‘r’ is the rate of interest, and ‘n’ is the loan tenure in months.

Floating Interest Rate Calculation

EMI = [P x r x (1 + r) ^n] / [(1 + r) ^(n-1)]

Where, ‘P’ is the principal loan amount, ‘r’ is the rate of interest, and ‘n’ is the loan tenure in months.

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