Mudra Loan Interest Rate Calculator
Compare Pradhan Mantri Mudra Yojana (PMMY) interest rates across major Indian banks in 2026 and calculate the exact interest cost for your Shishu, Kishore, Tarun or Tarun Plus loan. Rates are not fixed by RBI — each bank quotes its own range — so comparing before you apply can save you thousands of rupees over the loan tenure.
Mudra Loan Interest Rate Comparison by Bank (2026)
Indicative Mudra loan rate ranges offered by scheduled commercial banks in India for FY 2025-26. Actual rates quoted to you depend on your CIBIL score, business vintage, loan category, and bank relationship. Always request the Annual Percentage Rate (APR) which includes processing and documentation charges on top of the headline rate.
| Bank | Interest Rate Range | Processing Fee | Type |
|---|---|---|---|
| State Bank of India (SBI) | 8.5% – 10% | Nil for Shishu; 0.5% for Kishore/Tarun | Public Sector |
| Punjab National Bank (PNB) | 8.5% – 11% | Nil for Shishu; 0.5% for Kishore/Tarun | Public Sector |
| Bank of Baroda (BOB) | 9% – 10.5% | Nil for Shishu; up to 0.5% | Public Sector |
| Canara Bank | 8.75% – 10.5% | Nil for Shishu; 0.5% for Kishore/Tarun | Public Sector |
| Union Bank of India | 8.75% – 11% | Nil for Shishu; 0.5% for Kishore/Tarun | Public Sector |
| HDFC Bank | 10% – 12% | 0.5% – 1% | Private Sector |
| ICICI Bank | 10% – 11.5% | 0.5% – 1% | Private Sector |
| Axis Bank | 10.5% – 12% | 0.5% – 1% | Private Sector |
| Kotak Mahindra Bank | 10.5% – 12.25% | 0.5% – 1% | Private Sector |
* Rates are indicative for FY 2025-26 and subject to change. Confirm with your bank before applying.
Calculate Your Total Interest Cost
Plug in the rate range quoted by your shortlisted bank from the table above. Adjust the rate, loan amount, and tenure to see exactly how much interest you will pay over the life of the loan. Even a 0.5% difference compounds into meaningful savings.
Calculate Your EMI
KishoreMonthly EMI
₹3,226.72
What Determines Your Mudra Loan Interest Rate
Banks do not quote the same rate to every applicant. Your final Mudra loan interest rate is shaped by several factors. Understanding them helps you negotiate effectively:
- CIBIL score. A score of 750+ typically earns you the lower end of the bank's range. Below 650, expect the upper bound or rejection.
- Loan category. Shishu (up to Rs 50,000) often gets preferential rates because of government refinance backing. Tarun Plus loans are priced slightly higher.
- Business vintage. Existing businesses with 2+ years of ITR filings are seen as lower risk than new ventures.
- Banking relationship. Holding a savings or current account with the lender for 12+ months can unlock a pre-approved offer at a discounted rate.
- Rate benchmark. RLLR-linked (repo) loans fluctuate with RBI policy; MCLR-linked loans reset slower. Fixed rates stay the same but start higher.
- Collateral. Mudra loans are unsecured by policy, but voluntarily offering collateral can sometimes negotiate the rate down.
How to Get the Lowest Mudra Loan Rate
- Apply to 2–3 banks in parallel. Compare sanction letters side by side and ask each to match the best offer.
- Improve your CIBIL before applying. Clear outstanding credit card balances, avoid multiple loan applications in the 3 months prior, and check your report for errors.
- Start with a public sector bank. SBI, Canara, BOB and PNB consistently quote lower rates for PMMY than private banks.
- Choose RLLR during falling repo cycles. If RBI is cutting rates, a repo-linked Mudra loan passes the benefit to you every 3–6 months.
- Use your existing bank relationship. Approach the branch where your salary or business account is held first — they already have your KYC and transaction history.
- Submit a strong project report. A bank-ready report with CMA data and realistic projections signals lower risk and can tip negotiations in your favour.
Frequently Asked Questions
Which bank offers the lowest Mudra loan interest rate in 2026?
In 2026, public sector banks generally offer the lowest Mudra loan interest rates. State Bank of India (SBI), Canara Bank, and Bank of Baroda typically quote rates between 8.5% and 10% per annum, while Punjab National Bank (PNB) and Union Bank hover between 8.75% and 11%. Private banks like HDFC, ICICI, Axis and Kotak usually charge 10% to 12%. Final rates depend on your CIBIL score, business vintage, and loan category.
Is the Mudra loan interest rate fixed by the government or RBI?
No. Mudra loan interest rates are not fixed by RBI or the government. Under PMMY, each scheduled bank sets its own rate based on its cost of funds, repo rate linkage, risk weighting, and borrower profile. This is why you see a range (for example 8.5% to 12%) rather than a single rate. Always compare 2–3 banks before applying.
How can I negotiate a lower Mudra loan interest rate?
You can often negotiate 0.25% to 1% off the quoted rate by: (1) maintaining a CIBIL score of 750 or higher, (2) showing 2+ years of ITR filings and clean business vintage, (3) leveraging an existing savings or current account relationship with the bank, (4) getting competing offers from 2–3 banks and asking each to match the lowest, and (5) opting for a repo-linked floating rate rather than a fixed rate during low-rate cycles.
Does the Mudra loan category affect the interest rate?
The category (Shishu, Kishore, Tarun, Tarun Plus) primarily determines the loan amount range, not the rate directly. However, Shishu loans (up to Rs 50,000) often get the most favourable rates because they are backed by government refinance schemes and have zero processing fees. Larger Tarun and Tarun Plus loans may be priced slightly higher because the bank’s own credit risk exposure is larger.
What is the difference between fixed and floating Mudra loan rates?
A fixed-rate Mudra loan keeps the same interest rate for the entire tenure — your EMI never changes. A floating-rate Mudra loan is usually linked to the bank’s Repo Linked Lending Rate (RLLR) or Marginal Cost of Funds Lending Rate (MCLR) and adjusts every 3 or 6 months as those benchmarks move. Floating rates are cheaper when repo rates are falling; fixed rates offer predictability when rates are rising.
Are there hidden charges besides the Mudra loan interest rate?
Yes, beyond the stated interest rate you may pay: (1) processing fee of 0.5% to 1% for Kishore and Tarun loans (Shishu loans have zero processing fees), (2) documentation or legal charges of Rs 500 to Rs 2,000, (3) stamp duty as per state law, (4) CIBIL report fee, and (5) insurance premium if the bank mandates loan protection insurance. Always ask for the Annual Percentage Rate (APR) which includes all these costs, not just the headline interest rate.
Can the Mudra loan interest rate be revised during the loan tenure?
For fixed-rate Mudra loans, the rate cannot be revised during the tenure unless you refinance. For floating-rate loans linked to RLLR or MCLR, the rate is automatically reviewed every 3 or 6 months (as per your loan agreement) and your EMI may change accordingly. RBI guidelines require banks to notify you in writing whenever the applicable rate changes.
Related Tools
- Mudra Loan EMI Calculator → — See your monthly instalment and full amortization schedule.
- Mudra Loan Eligibility Calculator → — Check your likelihood of approval before you apply.
- 2026 Interest Rate Deep Dive → — Full bank-by-bank breakdown with negotiation tactics.
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