Meta Title: PM Mudra Loan 2026: Apply for a Business Loan Up to ₹20 Lakh
Meta Description: Learn how to apply for a PM Mudra Loan in 2026. Check eligibility, loan categories, interest rates, required documents, benefits and the online application process.
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Related Keywords: Mudra Loan Apply Online, PMMY Scheme, Mudra Business Loan, Government Business Loan, Mudra Loan Eligibility, Tarun Plus Loan.
What Is PM Mudra Loan 2026?
Starting or expanding a small business often requires financial support. However, many small entrepreneurs find it difficult to arrange funds because they may not have property or other assets to offer as security.
To improve access to formal business credit, the Government of India launched the Pradhan Mantri MUDRA Yojana (PMMY) on April 8, 2015.
Under this scheme, eligible small business owners can apply for collateral-free business loans through participating banks, Non-Banking Financial Companies (NBFCs) and Microfinance Institutions (MFIs).
In 2026, the scheme offers four loan categories, with financing available up to ₹20 lakh under the Tarun Plus category.
The scheme supports eligible income-generating businesses involved in manufacturing, trading, services and certain allied agricultural activities.
Whether you operate a small shop, manufacturing unit, repair business, food-processing enterprise or service-based business, you can explore whether PM Mudra Yojana meets your financing requirements.
PM Mudra Loan 2026: Loan Amount and Categories
The PM Mudra Yojana offers four categories based on the financial requirements and development stage of a business.
Here is the category-wise loan structure:
| Loan Category | Loan Amount |
|---|---|
| Shishu | Up to ₹50,000 |
| Kishor | Above ₹50,000 to ₹5 lakh |
| Tarun | Above ₹5 lakh to ₹10 lakh |
| Tarun Plus | Above ₹10 lakh to ₹20 lakh |
1. Shishu Loan: Up to ₹50,000
The Shishu category is designed for individuals who are starting a small business or operating at an early stage.
Examples of businesses include:
- Small grocery shops
- Street vending businesses
- Tailoring and repair shops
- Small food businesses
- Home-based enterprises
This category can help entrepreneurs arrange initial working capital or purchase essential equipment.
2. Kishor Loan: ₹50,000 to ₹5 Lakh
The Kishor category is suitable for businesses that have started operations and require additional funding.
The money may be used for:
- Purchasing business equipment
- Increasing inventory
- Improving shop infrastructure
- Expanding existing operations
- Managing working capital requirements
The final loan amount depends on the lender’s assessment of the business and applicant.
3. Tarun Loan: ₹5 Lakh to ₹10 Lakh
The Tarun category supports established or growing businesses that require additional financial resources.
For example, a small manufacturing business may need funds to purchase machinery, while a retail business may require additional working capital to expand its operations.
Applicants must satisfy the lending institution’s eligibility and credit assessment requirements.
4. Tarun Plus Loan: ₹10 Lakh to ₹20 Lakh
Tarun Plus is intended for entrepreneurs who have previously availed a Tarun-category Mudra loan and successfully repaid it.
Eligible borrowers can apply for financing above ₹10 lakh and up to ₹20 lakh under this category.
Important: A new applicant who has never successfully repaid a Tarun-category loan should not assume they qualify for Tarun Plus.
Who Is Eligible for PM Mudra Loan 2026?
Individuals interested in starting or expanding an eligible micro-business can explore the scheme.
The general eligibility requirements include:
- The applicant should be an Indian citizen.
- The applicant should have a viable business plan.
- The proposed activity should generate income.
- The business should fall within eligible manufacturing, trading, service or allied agricultural activities.
- The applicant must meet the lender’s credit and documentation requirements.
Businesses such as small manufacturing units, retail shops, repair services, food-processing businesses and eligible transport activities may be considered.
The final eligibility decision is made by the lending institution.
Which Businesses Can Get a Mudra Loan?
PMMY supports a range of micro-business activities.
Some examples include:
| Business Type | Possible Business Purpose |
|---|---|
| Grocery shop | Inventory and working capital |
| Tailoring business | Sewing machines and equipment |
| Beauty salon | Equipment and business expansion |
| Mobile repair shop | Tools and equipment |
| Food processing | Machinery and working capital |
| Dairy business | Eligible allied agricultural activity |
| Poultry business | Eligible business-related expenses |
| Small manufacturing | Machinery and production |
| Transport business | Eligible commercial vehicles |
| Trading business | Stock and working capital |
The eligibility of a particular activity and the permitted use of funds should be confirmed with the lender.
What Are the Interest Rates on Mudra Loans?
One common question among applicants is whether the government offers a fixed interest rate for Mudra loans.
The scheme does not prescribe one universal interest rate for every borrower.
Interest rates are determined by the lending institution according to applicable regulatory requirements, its lending policy and the applicant’s risk profile.
Factors that may affect the offered rate include:
- Loan amount
- Business activity
- Credit history
- Repayment capacity
- Lending institution
- Applicable loan terms
Before accepting a loan, applicants should compare the interest rate, processing charges, repayment period and other applicable costs.
Example of Mudra Loan EMI
The following table provides an illustrative EMI calculation for a loan with a 5-year repayment period.
| Loan Amount | Assumed Annual Interest | Approx. Monthly EMI |
|---|---|---|
| ₹1,00,000 | 12% | ₹2,224 |
| ₹2,00,000 | 12% | ₹4,449 |
| ₹5,00,000 | 12% | ₹11,122 |
| ₹10,00,000 | 12% | ₹22,244 |
| ₹20,00,000 | 12% | ₹44,489 |
These are hypothetical calculations, not official PMMY interest rates or guaranteed loan offers. Actual EMI will depend on the lender’s interest rate, repayment schedule and loan conditions.
Documents Required for PM Mudra Loan
Applicants may need to provide documents to establish their identity, address, business details and financial position.
Commonly requested documents include:
- Aadhaar card
- PAN card
- Address proof
- Recent passport-size photographs
- Bank account statements
- Business address proof, where applicable
- Business registration documents, where applicable
- Business plan or project report
- Estimated business expenses
- Relevant financial statements or income records, if requested
The exact documentation varies according to the lender, loan amount and nature of the business.
Applicants should obtain the latest document checklist from their selected bank or financial institution.
How to Apply for PM Mudra Loan Online in 2026?
Eligible applicants can approach participating banks and other lending institutions or explore the available online application facilities.
Follow these general steps:
Step 1: Prepare Your Business Plan
Before applying, prepare a basic business plan explaining:
- What type of business you want to start or expand.
- How much money you require.
- How the loan will be used.
- Your expected business income.
- How you intend to repay the loan.
A realistic business plan can help the lender understand your financing requirements.
Step 2: Visit the Official JanSamarth Portal
Visit the official National Portal for Credit-Linked Government Schemes:
Explore the available schemes and identify the relevant business loan option.
Step 3: Check Your Eligibility
Enter the requested details and complete the applicable eligibility assessment.
The portal may ask for information about your business, loan requirements and personal details.
Step 4: Submit Your Application
Follow the instructions provided by the portal or selected lending institution.
Provide accurate information and upload the requested documents.
Step 5: Complete the Lender’s Verification
The bank or financial institution may examine:
- Your identity and documents
- Business activity
- Credit history
- Financial position
- Repayment capacity
- Loan requirement
Additional documents or clarification may be requested.
Step 6: Loan Approval and Disbursement
If your application satisfies the lender’s requirements, the lender may issue a loan offer.
Carefully review the interest rate, repayment schedule, charges and other conditions before accepting the offer.
After completing the required formalities, the loan amount may be disbursed according to the lender’s procedure.
Does PM Mudra Loan Require Collateral?
PM Mudra Yojana provides collateral-free credit under the scheme.
This means eligible applicants do not have to provide traditional collateral security for the covered Mudra loan.
However, collateral-free does not mean guaranteed approval.
Lenders still assess the applicant’s business proposal, creditworthiness and repayment capacity before making a lending decision.
What Are the Benefits of PM Mudra Yojana?
Some important features of the scheme include:
1. Collateral-Free Credit
Eligible borrowers can access business financing without providing traditional collateral security.
2. Multiple Loan Categories
Four categories support different stages of business development, from very small businesses to growing enterprises.
3. Working Capital Support
Eligible businesses can seek funding for their working capital requirements.
4. Equipment Financing
Businesses may use eligible financing to purchase machinery, tools and other equipment.
5. Support for Women Entrepreneurs
Women entrepreneurs can also apply through participating lending institutions, subject to applicable eligibility and credit requirements.
6. Wide Business Coverage
The scheme supports eligible manufacturing, trading, service and allied agricultural activities.
Can a New Business Apply for a Mudra Loan?
Yes. Individuals planning to establish an eligible new micro-enterprise can explore PMMY financing.
A new business applicant may consider the appropriate loan category based on the funding requirement and lender assessment.
For example, someone planning to open a small retail shop may explore the Shishu or Kishor category depending on the amount required.
Applicants should prepare a practical business plan and realistic estimates of expected revenue and expenses.
Is There Any Government Subsidy Under PM Mudra Yojana?
PM Mudra Yojana is primarily a credit-based financing scheme, not a direct cash grant or universal subsidy programme.
Applicants should not assume that the loan amount will be provided free of cost or that repayment will be waived.
Other government programmes may offer separate subsidy or credit-linked benefits, depending on their eligibility rules.
Applicants interested in subsidies for establishing a business can also research the Prime Minister’s Employment Generation Programme (PMEGP), which operates under separate guidelines.
Important Things to Check Before Applying
Before submitting your application, keep these points in mind:
- Apply through a participating and regulated lending institution.
- Prepare a realistic business plan.
- Check the total borrowing cost.
- Compare repayment terms.
- Provide accurate information.
- Avoid agents promising guaranteed loan approval.
- Never share your banking OTP, PIN or passwords.
- Read the loan agreement carefully before accepting an offer.
A Mudra loan is a financial liability that must be repaid according to the agreed terms.
Frequently Asked Questions (FAQs)
1. What is the maximum Mudra loan amount in 2026?
The maximum loan amount under PMMY is ₹20 lakh under the Tarun Plus category. This category is available to entrepreneurs who have successfully repaid a previous Tarun-category loan.
2. Can I get a ₹10 lakh Mudra loan for a new business?
You can explore a Tarun-category application for an eligible new business. However, approval depends on the lender’s assessment of the business plan, financial requirements and repayment capacity.
3. Is a CIBIL score required for a Mudra loan?
Lending institutions may review credit history and other financial information while assessing applications. Requirements can differ between lenders. A particular credit score does not guarantee approval.
4. Can salaried individuals apply for a Mudra loan?
A salaried individual who plans to establish an eligible income-generating micro-business may explore the scheme. The applicant must satisfy the lender’s requirements.
5. Can women apply for PM Mudra Yojana?
Yes. Women entrepreneurs can apply for eligible Mudra loans through participating lending institutions.
6. Is Mudra loan interest-free?
No. Mudra loans are not universally interest-free. The applicable interest rate is determined by the lending institution.
7. Can I apply for a Mudra loan without collateral?
PMMY provides collateral-free credit under the scheme. However, the lender will still assess the applicant and business before approving the loan.
8. How can I check my Mudra loan application status?
Contact the lending institution where you submitted your application. If you applied through an online portal, check the application tracking facility provided there.
9. Can I use a Mudra loan for personal expenses?
PMMY financing is intended for eligible income-generating business purposes. It should not be treated as an ordinary personal loan.
10. Where can I apply for a PM Mudra loan?
Applicants can approach participating banks, NBFCs and MFIs or explore the official JanSamarth portal at https://www.jansamarth.in/.
Final Words
Pradhan Mantri MUDRA Yojana is an important financing initiative for eligible small entrepreneurs who need funds to establish, operate or expand their businesses.
With four loan categories ranging from Shishu to Tarun Plus, the scheme provides different financing options based on business requirements and eligibility.
Before applying, understand the loan terms, prepare a proper business plan and compare available lending options.
For the latest scheme information and application guidance, visit the official websites of the Department of Financial Services and JanSamarth.
Official information sources:
- Department of Financial Services: https://financialservices.gov.in/pradhan-mantri-mudra-yojana-pmmy
- JanSamarth Portal: https://www.jansamarth.in/
- Press Information Bureau: https://www.pib.gov.in/
Disclaimer: This article is independently prepared for educational and informational purposes. It is not an official government publication and is not affiliated with any government department, bank or financial institution. Scheme details, eligibility and lending conditions may change. Applicants should verify the latest information with official sources and their chosen lender before applying.
Last Updated: November 2026