The interest rate on a Mudra loan starts at 8% per annum. There is a reduction of 25 basis points on interest rates to Micro Finance Institutions (MFIs) and NBFCs providing loans to women entrepreneurs. In the case of the working capital loan, banks charge interest rates only on the amount held overnight.
Read on to learn more about the interest rates offered by different banks on Mudra loans and tips to get lower interest rates.
The following table provides details about the interest rates and tenures offered by different lending institutions:
Bank |
Interest Rate (p.a.) |
Tenure |
State Bank of India (SBI) |
Linked to MCLR |
3-5 years (with a moratorium period extending up to 6 months) |
IDBI Bank |
Linked to Bank’s Base Rate and Rating |
12 months to 5 years |
Bank of Baroda |
Linked to MCLR |
Up to 7 years |
Union Bank of India |
As per the bank’s guidelines |
Up to 7 years (with a moratorium period of up to 6 months) |
Central Bank |
Based on RBLR |
7 years |
Indian Bank |
Based on the repo rate |
2-5 years |
Bank of India |
As per the bank’s guidelines |
3-7 years |
Disclaimer: The above interest rates and terms are subject to change at the lender’s discretion.
Here are certain tips you can utilise to get a Mudra loan at low interest rates:
Compare lending offers from different banks, NBFCs, and MFIs
Maintain higher creditworthiness and repayment capacity as banks can offer lower rates to such borrowers
You can also get lower interest rates if your annual turnover is higher and business risk profile is low
A good credit history with no default or late repayments also helps ensure lower interest rates
The interest rate on these loans varies depending on the lending institution you choose, starting at 8% p.a.
The repayment tenure for Mudra loans varies from one lender to another.
The maximum loan amount you can get under this scheme is ₹10 Lakhs.