Mudra Loan Eligibility and Documents: Apply Guide (2026)
Reviewed by: WeCredit Research Team
Last updated: September 9, 2026
Mudra loan, offered under Pradhan Mantri MUDRA Yojana (PMMY), is meant to help eligible micro and small businesses get institutional credit without collateral. It can be used by businesses in manufacturing, trading, services and permitted allied agricultural activities.
Quick answer: In 2026, Mudra loans are available under Shishu, Kishor, Tarun and Tarun Plus. Eligible borrowers may get up to Rs. 20 lakh, but approval, interest rate, fees and tenure depend on the lender’s checks.
Mudra Loan Documents
The exact document list changes by lender, business type and loan amount. Still, most applicants should keep these documents ready before applying.
- Filled Mudra loan application form with passport-size photographs
- Identity proof such as Aadhaar, PAN, passport, voter ID or driving licence
- Address proof such as Aadhaar, passport, utility bill or bank statement
- Bank account details and recent bank statements
- Business proof such as Udyam registration, shop licence, GST details or business address proof, if applicable
- Quotation, invoice, stock estimate or use-of-funds note for the loan requirement
- Income proof, ITR, sales records or financial statements for higher loan amounts
- SC/ST/OBC/minority/women/PwD certificate, if claiming any relevant benefit through the lender or linked scheme
Documents for Vehicle Loan under PMMY
- Mudra loan application form
- Vehicle quotation or proforma invoice
- KYC and address proof of the applicant
- Business use explanation for the vehicle
- Bank statements and income proof as requested by the lender
Documents for Business or Working Capital Loan under PMMY
- Application form and photographs
- KYC documents of applicant/proprietor/partners
- Business existence proof and business address proof
- Bank statements, sales records or ITR, especially for Kishor, Tarun and Tarun Plus
- Project note, quotation or working capital requirement estimate
Mudra Loan Eligibility
Mudra loans are not personal loans. The loan should be linked to an income-generating business activity.
- Individuals, proprietors, partnership firms and eligible micro/small business units may apply, subject to lender policy.
- The business should usually be in manufacturing, trading, services or permitted allied agricultural activity.
- The applicant should have a clear business purpose and repayment plan.
- The lender may check KYC, bank statements, business vintage, cash flow, existing EMIs and credit history.
- Tarun Plus is only for entrepreneurs who have successfully repaid a previous Tarun category loan.
Types of Mudra Loan
PMMY uses loan categories to match funding with the stage of the business.
| Category | Loan amount | Who it is for |
|---|---|---|
| Shishu | Up to Rs. 50,000 | New or very small businesses needing basic working capital |
| Kishor | Above Rs. 50,000 and up to Rs. 5 lakh | Existing businesses needing inventory, tools or early expansion |
| Tarun | Above Rs. 5 lakh and up to Rs. 10 lakh | Established micro businesses planning growth |
| Tarun Plus | Above Rs. 10 lakh and up to Rs. 20 lakh | Borrowers who have repaid a previous Tarun loan successfully |
Mudra Loan Benefits
- Collateral is not required under PMMY.
- Loan can be used for term loan or working capital needs.
- Available through banks, RRBs, small finance banks, NBFCs, MFIs and NBFC-MFIs.
- Useful for micro businesses that need formal credit for growth.
- Four funding stages are available, from Shishu to Tarun Plus.
Interest Rate, Fees and Repayment
Mudra loan interest rates are not fixed by one central rate for all borrowers. The lender decides the rate, fee and tenure based on its policy and your business profile.
- Ask for the interest rate, processing fee, penal charges and total repayment amount.
- Check whether the facility is a term loan, overdraft, cash credit or working capital loan.
- Match the EMI or repayment cycle with your business cash flow.
- Do not pay unofficial agents who promise guaranteed approval.
How to Apply for Mudra Loan
- Read the official PMMY details on the Department of Financial Services website.
- Check government-sponsored credit options on JanSamarth, where available.
- Choose the right category: Shishu, Kishor, Tarun or Tarun Plus.
- Prepare KYC, bank statements, business proof and a use-of-funds note.
- Apply through a participating bank, RRB, small finance bank, NBFC, MFI or official lender channel.
- Read the sanction letter, EMI schedule, fees and repayment conditions before accepting.
Useful Related Guides
- SBI Mudra Loan
- HDFC Bank Mudra Loan
- Canara Bank Mudra Loan
- How to Apply for MSME and SME Loan Schemes Online
- CGTMSE vs Private MSME Loans
- How to Track Mudra Loan Application Status
Official Sources
Conclusion
Mudra loan can be a useful option for micro and small businesses that need collateral-free credit. Start with the documents, check eligibility, choose the right category and apply only through official lender or government-supported channels.
Frequently Asked Questions
What documents are required for a Mudra loan?
Common documents include the Mudra application form, KYC, address proof, bank statements, business proof, quotation or use-of-funds note, and financial documents for higher amounts.
Who is eligible for a Mudra loan?
Eligible applicants are usually non-corporate, non-farm micro and small enterprises involved in manufacturing, trading, services or permitted allied agricultural activities.
What is the maximum Mudra loan amount in 2026?
Eligible borrowers may get up to Rs. 20 lakh under PMMY. Tarun Plus covers loans above Rs. 10 lakh and up to Rs. 20 lakh for borrowers who have successfully repaid an earlier Tarun loan.
Is collateral required for Mudra loan?
No collateral is required under PMMY, but lenders still check eligibility, documents, repayment capacity and business purpose.
Can Mudra loan be used for personal expenses?
No. Mudra loan is for income-generating business activity, not for personal household or lifestyle expenses.
