Mudra Loan 2026 — Apply Online for ₹10 Lakh / ₹20 Lakh Tarun Plus, Eligibility
Mudra Loan 2026: Apply online for collateral-free MSME loan up to ₹10 lakh (Tarun) and ₹20 lakh (Tarun Plus, Budget 2024). Eligibility, four categories, documents and Udyam Mitra portal.
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Quick summary. Pradhan Mantri MUDRA Yojana (PMMY) offers collateral-free loans to non-corporate, non-farm small businesses through banks, NBFCs, MFIs and RRBs. Four categories by loan size: Shishu (up to ₹50,000), Kishor (₹50,000 – ₹5 lakh), Tarun (₹5 lakh – ₹10 lakh), Tarun Plus (₹10 lakh – ₹20 lakh — added in Budget 2024 for businesses that have already repaid a prior Tarun loan). Apply at any scheduled commercial bank, regional rural bank, cooperative bank, NBFC or MFI — directly at the branch or via the unified udyamimitra.in portal. Interest: typically MCLR + 1% to 3% (effective 9–14% range). Tenure: 3–7 years. No processing fee for Shishu; modest fee for Kishor / Tarun (capped at 0.5% of loan).
PMMY was launched on 8 April 2015 to formalise credit for India’s vast informal-sector micro-enterprises — kirana stores, beauty parlours, small workshops, food-cart vendors, tailors, small farmers’ shops. As of FY 2025–26, 45 crore loan accounts have been sanctioned with cumulative disbursal of ₹26.5 lakh crore. The Tarun Plus category (announced in the July 2024 budget and operationalised October 2024) doubles the cap for repeat borrowers — a Tarun loanee who repaid promptly can now access ₹20 lakh.
The single biggest practical insight: Mudra is not a separate scheme — it is a refinance facility through your existing bank. You don’t apply at “MUDRA”; you apply at your bank, which classifies the loan as Mudra at sanction. This means you can simply walk into the same SBI / PNB / HDFC branch where you have a savings account.
At a glance
| Category | Loan range | Typical use | Processing fee |
|---|---|---|---|
| Shishu | Up to ₹50,000 | Initial setup — buying a sewing machine, small inventory, repairing a stall | Free |
| Kishor | ₹50,001 – ₹5 lakh | Working capital, expanding inventory, buying equipment | Up to 0.5% (varies by bank) |
| Tarun | ₹5 lakh – ₹10 lakh | Adding a second outlet, larger machinery, fleet expansion | Up to 0.5% |
| Tarun Plus (Budget 2024) | ₹10 lakh – ₹20 lakh | For businesses that have repaid a prior Tarun loan in full | Up to 0.5% |
Who is eligible?
Educational Qualification
Not applicable
Age Limit (As on Date of application)
18 to 65 Years
Other Requirements
- Nationality: Indian citizen
- Engaged (or planning to engage) in non-farm income-generating activity in trading, manufacturing or services
- Eligible enterprise types — sole proprietorships, partnerships, MSMEs, Self-Help Groups (SHGs), small business units (NOT incorporated companies above MSME)
- No prior default with any bank / financial institution (CIBIL ≥ 650 typically required for Tarun and above)
- Must NOT be engaged in activities expressly excluded — alcohol manufacture / sale, tobacco, lottery, agriculture (separate KCC scheme)
- For Tarun Plus — must have a prior Tarun loan that has been repaid in full, with regular EMI track record
Documents required
While filling online form
- Aadhaar + PAN of applicant
- Recent passport-size photographs (2)
- Identity proof (Voter ID / DL / Passport)
- Address proof — utility bill / rent agreement / Aadhaar
- Last 6 months bank statement (the bank's own account or any other)
- Last 2 years' ITR + audited financials (for Tarun / Tarun Plus only)
- Business address proof — shop license / GST / municipal trade license / shop & establishment registration
- Quotations for equipment / inventory (if loan is for asset purchase)
- Project report / business plan — required for Tarun and Tarun Plus, optional for Shishu / Kishor
Get Udyam Registration first. Free, online at udyamregistration.gov.in, takes 5 minutes with Aadhaar OTP. Banks process Mudra applications faster for Udyam-registered enterprises.
How to apply
Method 1 — Walk into your bank branch (most common)
- Visit your existing bank where you hold a savings / current account.
- Ask for the Mudra Loan Application Form at the credit desk.
- Fill: borrower details, business activity, loan amount, purpose, financials.
- Attach photocopies of all documents above.
- Submit; collect dated acknowledgement.
- Bank does CIBIL check + field visit + financials review.
- Sanction in 7–14 days (Shishu / Kishor) or 15–30 days (Tarun / Tarun Plus).
Method 2 — Apply via Udyam Mitra portal
- Open www.udyamimitra.in → Apply for MUDRA loan.
- Register with mobile + Aadhaar OTP.
- Fill the unified application — choose category (Shishu/Kishor/Tarun/Tarun Plus) + preferred bank.
- Upload documents (PDF ≤ 5 MB each).
- Application routed to chosen bank + alternate banks.
- Bank credit officer follows up within 7 days.
Method 3 — At Common Service Centre
For first-time applicants without a bank account or comfortable with online forms: any CSC (Common Service Centre) accepts and forwards Mudra applications — fee ₹50 charged by the VLE.
⏰ Last Date: Open (rolling — no deadline)
Apply on Udyam MitraClicking this button will take you to the official government portal.
Interest rate, tenure, EMI
| Loan size | Typical interest rate | Tenure |
|---|---|---|
| Shishu (up to ₹50,000) | 11–14% (some banks 10%) | Up to 5 years |
| Kishor (₹50,001 – ₹5 lakh) | 10–13% | Up to 5 years |
| Tarun (₹5–10 lakh) | 9–12% | Up to 7 years |
| Tarun Plus (₹10–20 lakh) | 9–12% | Up to 7 years |
EMI calculator: a ₹5 lakh Mudra Tarun loan at 11% over 5 years = approximately ₹10,871 EMI per month. Most banks accept partial pre-payment without penalty.
Common rejection reasons & fixes
| Reason | Fix |
|---|---|
| CIBIL score below 650 | Clear pending dues with any bank / credit-card; wait 6–12 months for score to recover |
| No business proof / address | Get a shop & establishment license OR municipal trade license OR Udyam registration |
| Project report unrealistic | Get help from a CA / industry mentor; cite realistic revenue projections backed by similar businesses |
| Bank statement shows irregular cash flow | Reduce informal cash dealings; route business income through bank for 6 months before reapplying |
| Already classified as defaulter / restructured loan | Wait 3 years from settlement / closure; CIBIL classification must move to Standard |
Tarun Plus (₹20 lakh) — what’s new
Announced in the July 2024 Union Budget, Tarun Plus addresses a long-standing gap — micro-enterprises that grew on a Tarun loan and needed more credit had to either go to commercial loans (collateral-required) or stay capped at ₹10 lakh.
| Aspect | Detail |
|---|---|
| Eligibility | Must have completely repaid a prior Tarun loan in full |
| Loan range | ₹10 lakh to ₹20 lakh |
| Collateral | Still collateral-free (key feature retained) |
| Tenure | Up to 7 years |
| Effective from | October 2024 |
Banks generally see Tarun Plus as a low-risk extension since the borrower has already demonstrated repayment capacity.
Frequently asked questions
1. Is Mudra Loan really collateral-free?
2. How much can I borrow under Tarun Plus?
3. What is the interest rate?
4. How long does the loan take?
5. Can a fresh entrepreneur with no prior business apply?
6. Is Udyam registration mandatory?
7. Can I prepay the loan?
8. What activities are excluded from Mudra?
Latest updates
The 2026 budget retained the ₹20 lakh Tarun Plus cap introduced in 2024 and added a Mudra Card — a RuPay-compatible debit card for working-capital Mudra loans (up to ₹2 lakh card limit). The PMMY portal added an AI-based loan-eligibility checker in February 2026 that instantly tells applicants which banks are most likely to approve their profile. SIDBI’s MUDRA refinance allocation for FY 2026–27 stands at ₹2.4 lakh crore.
Official links
Disclaimer. SarkariBaba is an independent information publisher. Mudra interest rates, processing fees, and bank-specific terms vary — always negotiate with your branch and read the sanction letter before signing.
