Mudra Tarun Plus Loan: Eligibility, Limit and How to Apply
Reviewed by: WeCredit Research Team
Mudra Tarun Plus is the top category of the Pradhan Mantri Mudra Yojana (PMMY): a collateral-free business loan of above Rs. 10 lakh and up to Rs. 20 lakh. It is meant for borrowers who have already taken and successfully repaid a loan in the Tarun category, and you apply to a bank or other member lender, not to MUDRA itself.
Quick answer: Tarun Plus covers Mudra loans above Rs. 10 lakh up to Rs. 20 lakh, open to entrepreneurs who repaid an earlier Tarun loan. It is rare: 0.004 percent of all Mudra loans by number and 0.095 percent by amount sanctioned. Interest rates are set by each lender within RBI guidelines, and Mudra carries no subsidy. WeCredit does not sanction government scheme loans, so confirm every detail with the lender and on the official sources listed at the end.
Tarun Plus Loan at a Glance
| Item | Detail |
|---|---|
| Loan amount | Above Rs. 10 lakh and up to Rs. 20 lakh |
| Scheme | Pradhan Mantri Mudra Yojana (PMMY); the Rs. 20 lakh limit took effect on 24 October 2024 |
| Who it is for | Entrepreneurs who have availed and successfully repaid loans under the Tarun category |
| Security | Collateral-free loans up to Rs. 20 lakh are extended by member lending institutions |
| Guarantee | The Credit Guarantee Fund for Micro Units (CGFMU) covers these enhanced loans |
| Subsidy | None. The MUDRA website states there is no subsidy on PMMY loans |
| Interest rate | Deregulated; each lender sets its own rate within RBI guidelines |
| Who lends | Member lending institutions under PMMY, which MUDRA refinances |
| Where to apply | A lender branch or the Udyamimitra portal, plus the lender’s own online form where it has one |
How Tarun Plus Differs From Tarun
PMMY sorts loans into categories by amount. Smaller loans fall in the categories below Tarun, Tarun covers above Rs. 5 lakh up to Rs. 10 lakh, and Tarun Plus covers above Rs. 10 lakh up to Rs. 20 lakh. Tarun Plus was introduced when the scheme limit was raised from Rs. 10 lakh to Rs. 20 lakh, which took effect on 24 October 2024. If you have not yet borrowed at that level, the Mudra Tarun loan is the step below.
The key difference is the entry condition. A PIB release of 29 October 2024 describes Tarun Plus as a category designed specifically for those who have previously availed and successfully repaid loans under the Tarun category. So it works as a reward for a clean repayment record, not as a first-time loan.
| Category | Loan amount | Share of loans | Share of amount sanctioned |
|---|---|---|---|
| Tarun | Above Rs. 5 lakh up to Rs. 10 lakh | 2% | 25% |
| Tarun Plus | Above Rs. 10 lakh up to Rs. 20 lakh | 0.004% | 0.095% |
The shares come from PIB data as on 27 March 2026. Between them, Tarun and Tarun Plus take about 25 percent of the amount sanctioned. The figures show that Tarun Plus is still a small slice of the scheme, so some branches may handle few such files. Ask for the person who processes Mudra or MSME loans.
Who Is Eligible for a Tarun Plus Loan
The MUDRA website describes PMMY as lending to non-corporate, non-farm small and micro enterprises. On top of that, Tarun Plus has an entry condition. In practice, you should meet the following:
- Your business is a non-corporate, non-farm small or micro enterprise, such as a manufacturing, processing, trading or services unit.
- You have taken a loan in the Tarun category (above Rs. 5 lakh up to Rs. 10 lakh) and repaid it successfully. One lender’s product page words this as entrepreneurs who have availed and successfully repaid previous loans under the Tarun category.
- The amount you need is above Rs. 10 lakh and not more than Rs. 20 lakh.
- The lender is satisfied that the business can repay a loan of this size from its cash flow.
The official pages do not say whether the earlier Tarun loan must come from the same lender. Ask your branch whether it will accept a repayment record from another lender, and carry the closure letter or account statement of the earlier loan.
Collateral and the Guarantee Behind Tarun Plus
PIB records that collateral-free loans up to Rs. 20 lakh are extended under PMMY, and that the Credit Guarantee Fund for Micro Units (CGFMU) now provides guarantee coverage for the enhanced loans. The guarantee protects the lender if the loan turns bad. It does not make approval automatic, and the lender still reviews your business and repayment capacity. If you want to see how a loan and a guarantee fit together, read how Mudra differs from CGTMSE.
Who pays for the guarantee depends on the lender. Indian Bank, for example, states on its Tarun Plus page that the loan is mandatorily covered under CGTMSE or CGFMU and that the premium is borne by the borrower. Ask any lender you approach how it treats the guarantee cost and whether it is added to your loan.
Example of One Lender’s Published Terms
MUDRA does not publish a national rate, fee or tenure for Tarun Plus, so the lender’s own page is the best guide. Indian Bank publishes a Tarun Plus product table (page last modified 14 August 2026, read on 18 October 2026). Other lenders may differ, so treat this as one example, not a rule.
| Term | Indian Bank Tarun Plus |
|---|---|
| Eligibility | Entrepreneurs who have availed and successfully repaid previous loans under the Tarun category |
| Loan amount | Above Rs. 10 lakh, maximum Rs. 20 lakh |
| Facility | Term loan or working capital, as a need-based composite loan |
| Margin | 20% on stocks and book debts for working capital; 20% on the asset or machinery for a term loan |
| Primary security | Hypothecation of assets created from the loan and assets directly linked to the business |
| Collateral security | Nil |
| Interest rate | 10.00% at present (repo 5.25 + prime spread 2.70 + other spread 2.05) |
| Repayment | Term loan up to 60 months; working capital limit renewed every year |
| Fees | Processing, documentation and other charges as per the bank’s service charges circular |
Notice that this bank also expects a margin of 20 percent from you and wants the money paid straight to the supplier for term loans. That is common in larger business loans, so keep funds ready for your own contribution.
Documents Lenders Usually Ask For
There is no single national document list for Mudra loans. The MUDRA FAQ says documents are set by the lending institution, that a PAN card is not compulsory for PMMY loans, and that income tax returns are generally not insisted on for small-value loans. For a Rs. 10 lakh to Rs. 20 lakh request, expect a fuller file:
- Aadhaar of the applicant and of partners or directors, with PAN if the lender asks for it
- Address proof for your home and for the business place
- Proof that the business exists: Udyam registration, shop licence, GST registration if applicable, or a partnership deed
- The closure letter or repayment statement of your earlier Tarun loan
- Bank statements for the last twelve months and sales records or GST returns
- A project note or business plan with expected sales, costs and how the loan will be used
- A quotation or proforma invoice for the machinery, vehicle or stock you plan to buy
- Passport-size photographs
Ask the branch for its exact checklist before you go. The MUDRA FAQ notes that Kishor and Tarun loans use a three-page indicative application format, and the lender may supply its own.
How to Apply for a Tarun Plus Loan: Step by Step
The MUDRA website says a borrower can approach a lending institution or apply online through the Udyamimitra portal at udyamimitra.in. Some banks also run their own online form.
- Confirm that your earlier Tarun loan is fully repaid and that you have the closure proof.
- Work out the amount you need and what it will buy. It must be above Rs. 10 lakh and not more than Rs. 20 lakh.
- Prepare the documents above and a short plan with sales, costs and the EMI you can afford.
- Choose a lender. A bank that already holds your current account and your repayment history is a natural first stop.
- Ask for a Mudra loan in the Tarun Plus category and submit the application at the branch, on Udyamimitra, or on the lender’s online form.
- Answer the lender’s questions and allow a visit to your business place if asked.
- Read the sanction letter. Check the rate, tenure, EMI, margin, guarantee cost and processing charges before you sign.
- Use the money for the stated purpose, pay suppliers as the lender directs, and repay on schedule.
Never pay anyone to arrange a Mudra loan. You apply directly to the lender, and you should ask it for its charges in writing.
Worked Example: A Rs. 15 Lakh Tarun Plus Loan
Say a packaging unit repaid a Rs. 8 lakh Tarun loan and now wants to buy a machine costing Rs. 18,75,000. With a 20 percent margin, as in the Indian Bank example above, the unit brings Rs. 3,75,000 and borrows Rs. 15,00,000. The rate below is an assumption for illustration, taken from the 10.00 percent that bank shows at present, because real rates differ by lender and change over time. Over 60 months the EMI works out to about Rs. 31,871. The unit repays about Rs. 19,12,234 in total, of which about Rs. 4,12,234 is interest.
If the same unit borrowed Rs. 10,00,000 instead, the EMI would be about Rs. 21,247, and at Rs. 20,00,000 it would be about Rs. 42,494. Before you ask for the top of the range, check that your slowest month of sales can carry the EMI.
Is Tarun Plus Right for You? Checklist
- Have you repaid a Tarun loan in full? If not, look at Tarun or Kishor first.
- Do you need more than Rs. 10 lakh but not more than Rs. 20 lakh?
- Is your business a non-corporate, non-farm small or micro enterprise?
- Do you have a quotation or costed plan for the machine, stock or working capital?
- Can you bring the margin the lender asks for, such as the 20 percent in the example above?
- Will your monthly surplus cover the EMI with room to spare?
- Are your existing loans and card dues paid on time?
Common Rejection Reasons and Fixes
These are common patterns, not an official list. Each lender decides its own cases.
| Common reason | What to do |
|---|---|
| No proof of repaying an earlier Tarun loan | Bring the closure letter or statement; ask whether the lender accepts another lender’s record |
| Amount does not match the plan | Tie the amount to a quotation and pick the right category |
| Margin money not available | Arrange your own contribution before applying, or ask for a smaller loan |
| Weak cash flow for the EMI | Show twelve months of bank statements; reduce the amount or lengthen the term |
| Name or address differs across documents | Correct Aadhaar, PAN and bank records first |
| Overdue loans or missed EMIs | Clear dues and ask the lender what it needs to reconsider |
Timeline: Key Dates for Tarun Plus
| Date | Event |
|---|---|
| 24 October 2024 | New Rs. 20 lakh limit took effect; Tarun Plus added for borrowers who repaid Tarun loans |
| 29 October 2024 | PIB release announces the loan limit raised to Rs. 20 lakh with the new Tarun Plus category |
| 27 March 2026 | PIB data date: Tarun Plus at 0.004% of loans and 0.095% of amount sanctioned |
| 8 April 2026 | PIB publishes PMMY 11-year achievements, with the category-wise breakup |
When Another Option Fits Better
If you need less than Rs. 10 lakh, Tarun or Kishor is the better fit. If you have never repaid a Tarun loan, Tarun Plus is not designed for you yet. For a wider look at lending that needs no security, see these collateral-free government loans and compare the limits.
| Category | Loan amount | Best for |
|---|---|---|
| Mudra Shishu and Kishor | Loans smaller than Tarun | Smaller or newer units |
| Mudra Tarun | Above Rs. 5 lakh up to Rs. 10 lakh | Growing units that need equipment or working capital |
| Mudra Tarun Plus | Above Rs. 10 lakh up to Rs. 20 lakh | Borrowers who repaid a Tarun loan and need to scale up |
Common Mistakes
- Applying for Tarun Plus without having taken or repaid a Tarun loan.
- Paying an outsider to arrange the loan. You apply directly to the lender.
- Expecting a subsidy. The MUDRA website says there is no subsidy on PMMY loans.
- Assuming one national interest rate. Rates are set by each lender within RBI guidelines.
- Ignoring the margin money and the guarantee premium when planning cash.
- Signing without reading the sanction letter for fees and repayment schedule.
Frequently Asked Questions
What is the limit of a Tarun Plus loan?
Above Rs. 10 lakh and up to Rs. 20 lakh. Smaller needs fall under Tarun, Kishor or Shishu.
Who can get a Mudra Tarun Plus loan?
Entrepreneurs who have previously availed and successfully repaid loans under the Tarun category, running a non-corporate, non-farm small or micro enterprise.
Is a Tarun Plus loan collateral-free?
Yes. PIB describes PMMY loans up to Rs. 20 lakh as collateral-free, and CGFMU covers the enhanced loans. The lender still checks that your business can repay.
What is the interest rate on Tarun Plus?
It varies by lender. The MUDRA website says rates are deregulated and banks are advised to charge reasonable rates within RBI guidelines. Indian Bank shows 10.00 percent at present on its own page. Get the rate in writing before you sign.
Is there a subsidy on a Tarun Plus loan?
No. The MUDRA website states there is no subsidy for loans under PMMY.
Can I apply for Tarun Plus online?
Yes. The MUDRA website says borrowers can apply online through the Udyamimitra portal, and some banks have their own online form. You can also apply at a branch.
Is PAN card compulsory for a Mudra loan?
The MUDRA FAQ says a PAN card is not compulsory to avail PMMY loans. Lenders set their own document lists, so ask your branch.
Does WeCredit sanction Tarun Plus loans?
No. WeCredit does not sanction government scheme loans. It explains how schemes work. Confirm current terms with the lender and on the official sources below.
Where to Go Next
To compare Tarun Plus with other options for small businesses, browse the government loan schemes hub.
