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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.

Mudra Loan Interest Rates Offered by Banks

The following table provides details about the interest rates and tenures offered by different lending institutions:


Interest Rate (p.a.)


State Bank of India (SBI)

Linked to MCLR

3-5 years (with a moratorium period extending up to 6 months)


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.

Tips to Get Mudra Loans at Affordable Interest Rates

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

FAQs on Mudra Loan Interest Rate

What is the interest rate on Mudra loans?

The interest rate on these loans varies depending on the lending institution you choose, starting at 8% p.a. 

What is the repayment tenure for Mudra loans?

The repayment tenure for Mudra loans varies from one lender to another. 

What is the maximum loan amount I can get under the Mudra scheme?

The maximum loan amount you can get under this scheme is ₹10 Lakhs.

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