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How to Apply for PM Mudra Loan Online (Up to ₹10 Lakh)

Apply for collateral-free business loan up to ₹10 lakh under PMMY for non-corporate small businesses.

📁 Business Loan ⏱️ 20-30 mins 💰 Free Application

About This Guide

Pradhan Mantri Mudra Yojana (PMMY) was launched on April 8, 2015 to fund non-corporate, non-farm small/micro enterprises. Mudra (Micro Units Development & Refinance Agency) provides collateral-free loans up to ₹10 lakh to non-corporate, non-farm small businesses. Three categories: Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh). The scheme has disbursed over ₹26 lakh crore to 45+ crore beneficiaries since inception, primarily women entrepreneurs (70%+) and SC/ST/OBC categories. Mudra Card (similar to credit card) issued for working capital needs.

Eligibility Criteria

Indian citizen aged 18+ years
Non-corporate, non-farm small/micro enterprise
Activities: manufacturing, trading, services, allied agricultural activities
Existing or proposed new business
Good credit history (no major defaults)
Business should be income-generating
For startups: solid business plan required

Documents Required

Keep these documents ready before starting application. Missing documents = delayed approval.

Identity proof: Aadhaar, PAN, Voter ID
Address proof: Aadhaar, Electricity bill, Voter ID
Business proof: GST registration, Trade license, Shop establishment
2 passport photographs
Caste certificate (if SC/ST/OBC for additional benefits)
Business plan with financial projections (for Kishore/Tarun)
Last 6 months bank statements
Last 2 years ITR (if applicable)
Quotations of equipment/machinery to be purchased
Sale and purchase deed (if business premises owned)
Rent agreement (if business premises rented)

Step-by-Step Application Process

Follow these steps in order. Each step is critical - skip none.

Decide Loan Category

Shishu: For new businesses needing up to ₹50K. Kishore: Established business needing ₹50K-5L. Tarun: Mature business needing ₹5L-10L. Choose based on actual fund requirement.

Visit udyamimitra.in or Bank

Apply through https://udyamimitra.in (PSB Loans in 59 minutes portal) OR visit any bank/MFI/NBFC offering Mudra loans. Most public sector banks (SBI, PNB, BOB), private banks (HDFC, ICICI, Axis), and small finance banks participate.

Fill Application Form

Online: Register on udyamimitra.in, fill loan application. Offline: Get Mudra Loan Application Form from bank branch. Fill all sections - personal details, business details, loan amount, purpose.

Prepare Business Plan

For Kishore/Tarun loans, prepare business plan covering: business idea, products/services, market analysis, financial projections (5 years), cash flow, expected returns. Be realistic with numbers.

Attach Required Documents

Attach all documents listed above. Self-attested photocopies. For Shishu loans, fewer documents needed. Higher loan amount = more scrutiny.

Submit at Bank Branch

Submit application with documents at bank branch. Get acknowledgment receipt with reference number. Track status with this reference.

Bank Verification

Bank verifies your application: identity check, business existence verification (may visit your business premises), creditworthiness check, business viability assessment. Takes 7-15 days.

Loan Processing

If approved, bank issues sanction letter mentioning loan amount, interest rate, tenure, EMI. Interest rates: typically MCLR + 0-3% depending on profile. Sign loan agreement.

Document Submission and Disbursement

Sign loan documents at bank. Loan disbursed to your business bank account or directly to vendor for asset purchase. For working capital, money credited to current account.

Get Mudra Card

Apply for Mudra Card (RuPay debit card linked to working capital limit). Use it like credit card for business expenses, withdraw cash, swipe at POS. Works for Shishu and Kishore.

Key Benefits

Collateral-free loan up to ₹10 lakh
No processing fee for Shishu (up to ₹50K)
Lower processing fees for Kishore/Tarun
Mudra Card for working capital management
Refinance option from Mudra to participating institutions
Lower interest rates compared to private moneylenders
Special focus on women, SC/ST/OBC entrepreneurs
Tenure flexibility: 1-5 years typically

What Happens After Application?

After disbursement, use loan amount strictly for business purpose. Maintain proper books of accounts. Pay EMIs on time - default damages credit score for future loans. After successful repayment of Shishu, you can take Kishore (₹5L); after Kishore success, Tarun (₹10L). For any issues, contact your bank branch first. Escalation: District Lead Bank → State Level Banker's Committee → SLBC. Mudra Helpline: 1800-180-1111.

Frequently Asked Questions

Is collateral required for Mudra loan?

No, all Mudra loans up to ₹10 lakh are collateral-free. However, banks may need primary security (asset created from loan) for higher amounts. Personal guarantee not mandatory but sometimes asked.

What is the interest rate for Mudra loans?

Interest rates vary by bank: typically 8.40% to 12% per annum. Public sector banks usually offer lower rates. Rate depends on borrower profile, loan amount, business viability.

Can I use Mudra loan for personal use?

No, Mudra loans are strictly for business purposes. Using for personal expenses is loan diversion - bank can recall full amount immediately and charge penalty. Maintain proper records.

Loan rejection - what reasons?

Common rejections: poor credit score, incomplete documents, unviable business plan, existing loan defaults, mismatch in income vs loan amount. Get rejection reason and address before reapplying.

Can NRI apply for Mudra loan?

No, Mudra is only for Indian citizens. NRIs not eligible. Even if business is in India, applicant must be resident Indian.