Mudra Loan How to Apply in 2026: Step-by-Step Guide to PM Mudra Yojana
If you run a small business, plan to start one, or simply need working capital without pledging any asset, knowing how to apply for a Mudra loan in 2026 could be the most useful thing you do this year. The Pradhan Mantri Mudra Yojana (PMMY) has disbursed over 57.79 crore loans worth ₹40.07 lakh crore since its launch in April 2015 — making it one of India's largest small-business credit schemes.
This guide covers everything in one place: the four loan categories, who qualifies, what documents you need, the exact online and offline application steps, current indicative interest rates, and what to do if your application is rejected.
What Is the PM Mudra Loan Scheme and Who Is It For?
MUDRA stands for Micro Units Development & Refinance Agency. The scheme provides collateral-free loans to non-corporate, non-farm micro and small enterprises across India. If you are a shopkeeper, street vendor, artisan, tailor, food-stall owner, beauty salon operator, or small manufacturer, you are exactly the target borrower.
Loans are channelled through public-sector banks, private banks, Regional Rural Banks (RRBs), Small Finance Banks, NBFCs, and Microfinance Institutions (MFIs) — not directly by MUDRA Ltd. That means you apply at a bank or NBFC, not at a MUDRA office. If you already bank with State Bank of India or Punjab National Bank, starting there is often the fastest route since your KYC is already on record.
Women borrowers receive a small interest concession from many lenders. Importantly, women account for 67% of all Mudra beneficiaries, reflecting how central gender inclusion is to the scheme's design.
Mudra Loan Categories in 2026: Shishu, Kishore, Tarun & Tarun Plus
The scheme now has four tiers, updated following the Union Budget announcement that raised the ceiling from ₹10 lakh to ₹20 lakh via the new Tarun Plus category:
| Category | Loan Amount | Who It Suits | Collateral |
|---|---|---|---|
| Shishu | Up to ₹50,000 | New or very early-stage businesses | None |
| Kishore | ₹50,001 – ₹5 lakh | Existing businesses needing growth capital | None |
| Tarun | ₹5 lakh – ₹10 lakh | Established micro-enterprises scaling up | None |
| Tarun Plus | ₹10 lakh – ₹20 lakh | Borrowers who have fully repaid a Tarun loan | None |
Tarun Plus is available only to entrepreneurs who have successfully closed a previous Tarun loan. First-time applicants can access up to ₹10 lakh through the Shishu, Kishore, or Tarun categories.
Need even larger funding for your business? Explore Business Loan options or MSME Working-Capital Loan options on OnePaisa to compare lender-specific rates and amounts beyond the PMMY ceiling.
Mudra Loan Eligibility in 2026
There is no single fixed eligibility checklist — each lender applies its own assessment. That said, the following criteria apply broadly across participating institutions:
- Citizenship: Indian resident citizen
- Business type: Non-farm, non-corporate micro or small enterprise (manufacturing, trading, or services)
- Age: Generally 18–65 years
- Credit history: No active loan default; a clean repayment record improves approval odds significantly
- Business activity: Existing or proposed business must fall under PMMY-eligible sectors (retail, food processing, textile, transport, etc.)
- CIBIL score: Not a hard requirement for smaller Shishu loans, but helpful — and increasingly important — for Kishore and Tarun amounts
Agricultural and large-corporate borrowers are excluded. Use the loan eligibility calculator on OnePaisa to get a quick read on your borrowing capacity before approaching a lender.
Documents Required for a Mudra Loan Application
Keep these ready before you walk into a branch or start an online application — incomplete documentation is one of the top reasons applications are delayed or rejected:
- Identity proof (any one): Aadhaar card, PAN card, Voter ID, Driving Licence, Passport
- Address proof (any one): Aadhaar, recent utility bill (electricity/water), bank statement with address
- Business proof: Trade licence, GST registration certificate, udyam registration, or business incorporation documents
- Bank statements: Last 6–12 months of the applicant's or business account
- Photographs: Recent passport-size photographs of the applicant
- Application form: Shishu applicants use a simplified one-page form; Kishore and Tarun applicants complete a more detailed three-page form (downloadable from the MUDRA website or the lender's portal)
- SC/ST/OBC/minority certificate: Where applicable, for potential interest concessions
- Business plan or project report: Required for higher amounts (Kishore/Tarun), covering projected revenue, expenses, and repayment capacity
Tip: Self-attest all photocopies. Scan documents at a high resolution (minimum 200 DPI) if applying online to avoid rejection at the upload stage.
How to Apply for a Mudra Loan in 2026 — Online Step-by-Step
The fastest online route is through the JanSamarth Portal (jansamarth.in), the government's unified credit platform. Here is how:
- Visit jansamarth.in and scroll to "Business Activity Loans".
- Click "Check Eligibility" and select your business category.
- Fill in your business details and click "Calculate Eligibility". The portal will display eligible PMMY schemes and indicative loan amounts.
- Select the Mudra Loan offer that matches your category (Shishu / Kishore / Tarun).
- Click "Login to Apply", enter your mobile number, and verify via OTP.
- Provide your email address and verify it with a second OTP. Set a password.
- Complete the application form — personal details, business information, loan amount — and upload scanned documents.
- Review all entries carefully and click Submit.
- Note your application reference number; use it to track status on the same portal.
Alternatively, you can apply directly on any participating bank's own website (SBI, Bank of Baroda, Canara Bank, HDFC Bank, etc.) or through the Udyamitra portal (udyamimitra.in).
How to Apply Offline
- Visit the nearest branch of a MUDRA-empanelled bank or MFI.
- Request the Mudra loan application form (Shishu or Kishore/Tarun as applicable) or download it from the lender's website.
- Fill in personal, business, and financial details accurately.
- Attach self-attested copies of all required documents.
- Submit the completed form and documents to the branch manager.
- The lender will verify documents and assess your business viability. Upon approval, the loan amount is disbursed to your account — typically within 7–10 working days for routine applications.
MUDRA Card: Once sanctioned, many lenders issue a RuPay-based MUDRA debit card linked to your working-capital loan account. You can withdraw funds as needed rather than taking the full amount at once — ideal for managing day-to-day business cash flow.
Mudra Loan Interest Rates in 2026
There is no single government-mandated interest rate under PMMY. Each participating lender sets its own rate based on the loan category, your credit profile, and the lender's internal policy. Indicative rates generally range from 8.85% to 13% per annum — these are not guaranteed and will vary by lender and applicant profile.
| Category | Indicative Rate (p.a.) | Repayment Tenure |
|---|---|---|
| Shishu | 8.85% – 10% | Up to 5 years |
| Kishore | 9% – 12% | Up to 5 years |
| Tarun | 10% – 13% | Up to 7 years |
| Tarun Plus | 10% – 13% | Up to 7 years |
Rates are indicative and lender-specific. Always request a formal loan offer letter to confirm your exact rate before signing.
To compare actual business loan rates from ICICI Bank, Axis Bank, Bajaj Finance, and other top lenders side by side, visit the OnePaisa loans by lender hub.
Why Mudra Loan Applications Get Rejected — and How to Avoid It
Understanding common rejection reasons helps you apply smarter:
- Poor CIBIL score: A history of defaults or late payments is the single biggest red flag. Check and improve your score before applying.
- Incomplete or mismatched documents: Even a minor mismatch between your Aadhaar name and PAN name can trigger delays.
- No business proof: Without a trade licence, GST certificate, or udyam registration, lenders cannot verify your business exists.
- Applying for a non-eligible activity: Agricultural, corporate, and personal-use loans are outside PMMY scope.
- Existing loan default: Any unresolved NPA or default will result in outright rejection.
If rejected at one bank, get the reason in writing and try a different lender — each institution uses its own credit assessment criteria. NBFCs and MFIs often have less stringent requirements for smaller Shishu loans.
Frequently Asked Questions
Can I apply for a Mudra loan if I have no existing business?
Yes, but only under the Shishu category (up to ₹50,000). For Kishore and Tarun loans, lenders prefer at least six months of business activity and bank statements to assess repayment capacity. A detailed business plan helps first-time applicants.
Is there any processing fee or collateral for a Mudra loan?
No collateral is required under any PMMY category. Processing fees vary by lender — many public-sector banks waive them for Shishu loans. Always ask for a fee schedule before submitting your application.
How long does it take to get a Mudra loan approved?
Online applications via JanSamarth with complete documentation are typically processed in 7–14 working days. Offline branch applications may take slightly longer depending on the lender's workload and document verification.
Can I get a Mudra loan for ₹20 lakh as a first-time borrower?
No. The ₹20 lakh Tarun Plus category is available only to borrowers who have already fully repaid a Tarun loan. First-time applicants can access a maximum of ₹10 lakh under the Tarun category.
What is the MUDRA Card, and do I need it?
The MUDRA Card is a RuPay debit card issued to working-capital loan borrowers. It lets you withdraw funds incrementally as business needs arise, rather than receiving and managing a lump sum. It is optional, but particularly useful for businesses with irregular cash-flow cycles.
Ready to Apply? Compare Lenders on OnePaisa First
Mudra loans are a powerful tool for small-business growth — but the rate and terms you get depend heavily on the lender you choose. Before you walk into a branch or submit an online application, take two minutes to find your loan on OnePaisa and compare real offers from banks and NBFCs side by side.
Already know what you need? Explore the full range of loans available on OnePaisa, check your loan eligibility calculator, or browse Business Loan rates from leading lenders to make sure you are getting the best deal for your business in 2026.
Loans Editor, OnePaisa Editorial
Prasanth writes on borrowing for OnePaisa — personal, home, car and business loans, and the credit-score questions that decide what a borrower is actually offered. Interest rates, processing fees and eligibility rules in his guides come from lender schedules of charges and official product pages, are cross-checked against OnePaisa's verified lender data, and are dated so readers can see how current they are. A rate that a lender publishes as a range is published here as a range, never as a single teaser number.
Work published under this byline follows OnePaisa’s editorial standards — how our guides are researched, fact-checked against primary sources, and corrected.