Mudra Loan Eligibility: what actually decides your application
You are eligible for a Mudra loan if you run a non-corporate, non-farm micro or small enterprise in manufacturing, services, trading including retail, or an allied agricultural activity such as dairy, poultry, beekeeping or fisheries. There is no minimum turnover written into the scheme and no fixed credit score threshold. Crop farming itself, anything banned by law and speculative activity are outside it. That is the published criteria - what actually decides an application is narrower.
Two things worth being clear about
- There is no such thing as guaranteed approval. The credit guarantee under this scheme protects the lender against a portion of a default. It is not approval for the borrower, and a default still lands on your credit record and is still recovered from you.
- The loan does not come from the government. MUDRA Ltd. refinances lending institutions and the loan is guaranteed under CGFMU. The loan itself comes from a bank, NBFC or MFI, and the sanction decision is that institution's alone.
What it costs per month
Pre-set to 8.5%, the reference starting rate for public sector bank lending under this scheme. There is no scheme-set rate - change it to the rate you have actually been quoted to see your real instalment, total interest and full repayment schedule.
Indicative loan amount
₹14.62 Lakh
An estimate from income and obligations only, not an offer
Lenders cap total EMIs at a share of gross income. This calculator applies 50% for your income band. The lender's own assessment also weighs credit score, employment and the property.
Year-by-year repayment schedule
How each year splits between interest and principal. Early years are mostly interest, which is why prepaying early saves so much more than prepaying late.
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | ₹2,45,113 | ₹1,14,887 | ₹12,17,122 |
| 2 | ₹2,66,779 | ₹93,221 | ₹9,50,343 |
| 3 | ₹2,90,360 | ₹69,640 | ₹6,59,983 |
| 4 | ₹3,16,025 | ₹43,975 | ₹3,43,959 |
| 5 | ₹3,43,959 | ₹16,041 | ₹0 |
This calculator returns arithmetic on the figures you enter. It is not an offer, does not check your eligibility, and cannot predict the rate a lender will sanction. Loans Got Easy is an authorised Direct Selling Agent - we do not sanction, approve or disburse loans.
The published criteria are the easy part
Almost every micro enterprise clears the scheme's own eligibility test, which is why the criteria are a poor guide to whether you will get the loan. The scheme does not set a turnover floor, a minimum vintage or a credit score cutoff. The lending institution sets all three, in its own credit policy, and it is that policy the file is actually assessed against. Two branches of the same bank can differ. This gap between scheme eligibility and lender eligibility is the single biggest source of misplaced confidence we see.
What the branch is really testing
Whether the business exists and trades. Not in principle - on the day someone visits. Stock on the shelves, signage, a person present, customers. Then whether the bank statements corroborate the turnover you have claimed, whether your credit record shows you service obligations, and whether the amount you have asked for is proportionate to what the business demonstrably earns. A viable business with a badly evidenced file loses to a modest business with a clean one, consistently.
Credit score
There is no scheme-mandated score, and there is no scheme provision that overrides a lender's credit view. A Mudra loan is a bank loan classified under a scheme, and your record is assessed as it would be on any business loan. Existing defaults, settled accounts and a pattern of missed EMIs all count against a file. If your score is weak, the realistic route is to repair it before applying rather than to hope the scheme label carries you.
Allied agriculture, which is more often eligible than people assume
Dairy, poultry, beekeeping, fisheries and similar allied activities are inside the scheme. Crop farming is not. In Telangana and Andhra Pradesh this distinction matters commercially - allied activity is significant in both states, and a large number of applicants read 'non-farm' as excluding anything rural. It does not. If your enterprise is a dairy unit or a poultry shed rather than a field, you are within scope.
Frequently Asked Questions
The scheme does not set one. Each lender applies its own credit policy, and in practice a weak score, existing defaults or recent missed EMIs will affect the decision exactly as on any business loan. There is no scheme provision that overrides the lender's credit assessment.
More on Mudra Loan
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Loans Got Easy is a loan advisory and Direct Selling Agent. We help prepare and place the file. We do not sanction, approve or disburse, and we cannot influence a scheme outcome - that decision belongs to the lending institution.