UCO Bank Mudra Loan: Rates, Eligibility and How to Apply
Reviewed by: WeCredit Research Team
UCO Bank offers Mudra loans in three categories under the Pradhan Mantri Mudra Yojana: Shishu up to Rs. 50,000, Kishor from Rs. 50,001 to Rs. 5 lakh, and Tarun from Rs. 5,00,001 to Rs. 10 lakh. UCO’s product page shows no processing charge on Shishu and no documentation charge on Shishu or Kishor, and its published rate for Shishu is 9.15% a year.
Quick answer: apply through UCO Bank’s own digital loan pages, with a valid Udyam certificate, Aadhaar and one other identity document. WeCredit does not sanction government scheme loans, and UCO Bank decides every approval. Confirm current rates and charges on UCO Bank’s Mudra product page before you apply.
UCO Bank Mudra Loan at a Glance
| Item | What UCO Bank’s product page says |
|---|---|
| Scheme | Pradhan Mantri Mudra Yojana (PMMY), for micro enterprises |
| Categories at UCO | Shishu, Kishor and Tarun, up to Rs. 10 lakh |
| Shishu rate (base 8.05% plus 1.10%) | 9.15% a year, subject to change |
| Kishor rate (base 8.05% plus 2.10%) | 10.15% a year, subject to change |
| Processing charge | Nil for Shishu; documentation charge Nil for Shishu and Kishor |
| Tenure | Shishu: 12 to 36 months. Kishor term loan: 12 to 60 months |
| Security | Shishu: personal guarantee of the owner, partners or directors, with guarantee-fund cover (CGFMU). Kishor and Tarun: ask the branch |
| Who it is for | Micro enterprises such as proprietorships, partnerships, LLPs and private or public limited companies |
The rates above are the figures shown on UCO’s product page, which carries a last-updated date of 29 January 2026. The bank states that rates and charges can change, so ask the branch for the rate it will apply on your sanction date.
Mudra Categories and How UCO Applies Them
The Ministry of Finance, through PIB, lists four PMMY categories: Shishu up to Rs. 50,000, Kishor above Rs. 50,000 and up to Rs. 5 lakh, Tarun above Rs. 5 lakh and up to Rs. 10 lakh, and Tarun Plus from Rs. 10 lakh up to Rs. 20 lakh. Tarun Plus, announced on 25 October 2024, is meant for borrowers who took a Tarun loan earlier and repaid it. For a closer look at the smallest ticket, read about the Mudra Shishu loan.
UCO Bank’s product pages describe Shishu, Kishor and Tarun. They do not describe a Tarun Plus product, so ask your branch whether it sanctions loans above Rs. 10 lakh under Mudra before you plan around that limit.
| Feature | Shishu | Kishor | Tarun |
|---|---|---|---|
| Loan amount | Up to Rs. 50,000 | Rs. 50,001 to Rs. 5 lakh | Rs. 5,00,001 to Rs. 10 lakh |
| Age of owner | 18 to 65 years | 18 to 70 years | Ask the branch |
| Repayment | 12 to 36 months, EMI, no moratorium | Term loan 12 to 60 months; cash credit reviewed yearly | Ask the branch |
| Interest rate shown | 9.15% | 10.15% | Ask the branch |
| Documentation charge | Nil | Nil | 0.50% of sanction, minimum Rs. 250, maximum Rs. 2,500 |
Interest Rate, Fees and Guarantee Cost
UCO prices its Mudra loans as a floating base rate plus a spread. On the product page the base is 8.05%, the Shishu spread is 1.10% and the Kishor spread is 2.10%. Because the base moves, the rate on your sanction letter can differ from the figure printed on the page.
| Charge | Shishu | Kishor |
|---|---|---|
| Processing charge | Nil | Ask the branch |
| Documentation charge | Nil | Nil |
| Inspection, review and renewal | Nil | Ask the branch |
| Credit report charge | Rs. 100 plus GST for a consumer report | Rs. 177 including GST for a consumer report |
| Business credit rank | Rs. 1,600 including GST | Rs. 1,600 including GST |
| Guarantee-fund fee (CGFMU) | 1% plus risk premium plus GST on the sanctioned amount | Ask the branch |
| E-signing and e-stamping | Actual cost plus GST | Ask the branch |
Do not overlook the guarantee-fund fee. On a Rs. 50,000 Shishu loan, 1% is Rs. 500 before the risk premium and GST are added. UCO’s page says this fee is recovered from your operating account.
UCO also asks you to insure any asset bought with the loan, with a bank clause, and the borrower pays that premium.
Worked Example: What Two Loans Cost
These figures use the rates printed on UCO’s page. They are illustrations, not a quote, and exclude the fees listed above.
| Shishu example | Kishor example | |
|---|---|---|
| Loan amount | Rs. 50,000 | Rs. 3,00,000 |
| Rate used | 9.15% a year | 10.15% a year |
| Tenure | 36 months | 60 months |
| Monthly EMI | about Rs. 1,593 | about Rs. 6,396 |
| Total repaid | about Rs. 57,365 | about Rs. 3,83,777 |
| Total interest | about Rs. 7,365 | about Rs. 83,777 |
Who Can Apply (Eligibility)
- The borrower must be a micro enterprise as defined under the MSMED Act: an individual, proprietorship, partnership firm (including LLP), or a private or public limited company.
- The owner’s age must fall in the band for the category: 18 to 65 years for Shishu and 18 to 70 for Kishor.
- You need a valid Udyam registration certificate for the digital Shishu route.
- You need Aadhaar and one other officially valid document such as PAN, passport, driving licence or voter ID.
- The mobile number you register with must be linked to your Aadhaar, because UCO’s digital Shishu route requires it.
- UCO sorts digital Shishu applicants into existing-to-bank customers, who have kept a savings or current account with UCO for at least one year, and new-to-bank customers, who have had a UCO account for less than a year or bank with another institution. Both groups must not have taken a business credit facility.
- Applicants should not be defaulters of any bank or financial institution, as the bank’s MSME page states.
Documents to Keep Ready
UCO’s MSME page describes its document list as indicative, so the branch may ask for more. For a Shishu loan the list is:
- Photo identity proof: voter ID, driving licence, PAN, Aadhaar or passport
- Proof of residence
- Two recent photographs
- A quotation for the machinery or item you plan to buy, with supplier details
- Business licence or registration, if you have one
- Caste or minority certificate, if you claim a category benefit
- Udyam registration certificate and recent bank statements for the digital route
For Kishor and Tarun, UCO adds six months of bank statements, two years of balance sheets and tax returns for loans of Rs. 2 lakh and above, projected financials for the next year, a project report, your partnership deed or company memorandum and articles, and an asset and liability statement where no third-party guarantee is given.
How to Apply: Step by Step
- Get your Udyam certificate on the Udyam Registration portal if you do not have one.
- Check that your mobile number is linked to Aadhaar.
- Open UCO Bank’s Shishu Mudra product page and use its Apply Now button, which leads to the bank’s digital MSME loan page. For Kishor, the bank’s page links to its online loan application portal.
- Enter your business and identity details and upload bank statements as a system-generated PDF or through net-banking credentials. UCO accepts up to three statements: your UCO account plus two other bank accounts for existing customers, or any three accounts for new-to-bank customers.
- Wait for the bank’s appraisal. UCO charges a fee for pulling your credit report.
- On sanction, sign the loan documents electronically. UCO e-stamps them through NeSL.
- Read the sanction letter for the rate, EMI, tenure, guarantee fee and insurance condition before you accept.
If you prefer to apply in person, ask your nearest UCO branch how it handles Mudra applications and carry the documents above.
Is a UCO Mudra Loan Right for You? A Quick Checklist
- My business is a micro enterprise with Udyam registration.
- I need Rs. 10 lakh or less for working capital or equipment.
- I can offer the personal guarantee that UCO’s Shishu terms ask for.
- I can afford the EMI from business income, including in a slow month.
- My Aadhaar-linked mobile number and bank statements are ready.
If you answered no to the first two, a different product may suit you better. If you need more than Rs. 10 lakh, UCO’s Digital MSME Smart Finance loan is a separate product, described in the table below.
UCO Mudra Compared With Other Options
| UCO Mudra (Kishor) | UCO Digital MSME Smart Finance | PMMY Tarun Plus (scheme limit) | |
|---|---|---|---|
| Amount | Rs. 50,001 to Rs. 5 lakh | Up to Rs. 25 lakh | Above Rs. 10 lakh up to Rs. 20 lakh |
| Rate shown | 10.15% | 10.15% | Ask the lender |
| Tenure | Up to 60 months (term loan) | Up to 84 months (term loan) | Ask the lender |
| Fees | Documentation Nil | 0.50% plus GST unified fee, Rs. 2,000 plus GST conveyance fee | Ask the lender |
| Who it suits | Small non-farm businesses | Larger MSME needs | Tarun borrowers who repaid earlier |
Other public sector banks publish their own Mudra terms, so it is worth comparing before you commit. The Indian Bank Mudra loan page is one example of how another lender sets its terms.
Why Applications Stall and How to Fix Them
| Problem | Why it blocks the application | Fix |
|---|---|---|
| No Udyam certificate | The digital Shishu route requires it | Register on the Udyam portal first |
| Mobile not linked to Aadhaar | UCO’s digital Shishu route requires an Aadhaar-linked mobile number | Link the number before you apply |
| Statements in the wrong format | Only system-generated PDFs or net-banking credentials are accepted | Download statements from net banking |
| Existing business loan | The Shishu route is for borrowers without a business credit facility | Ask the branch about Kishor or another product |
| Owner above the age band | Shishu stops at 65 and Kishor at 70 | Ask the branch which product fits |
| Past default | The bank requires that you are not a defaulter | Clear dues and wait for the record to update |
Common Mistakes to Avoid
- Calling the loan free of cost. The guarantee-fund fee, credit report charge, e-stamping and insurance still apply.
- Relying on an old rate from a blog or aggregator. UCO states that its rates change, so read the current figure on the bank page.
- Paying an agent to arrange a Mudra loan. Apply only through the bank’s own pages or a branch.
- Borrowing the full limit without an EMI plan. Use the worked example above to test your cash flow.
WeCredit does not sanction government scheme loans, and the lender, not WeCredit, decides every approval. You can browse other schemes on our government loan schemes hub.
Frequently Asked Questions
What is the maximum UCO Bank Mudra loan?
UCO’s product pages cover Shishu, Kishor and Tarun, which together go up to Rs. 10 lakh. The PMMY scheme itself allows up to Rs. 20 lakh through Tarun Plus, so ask the branch whether it offers that tier.
What is the interest rate on a UCO Mudra loan?
The bank’s page shows 9.15% for Shishu and 10.15% for Kishor, calculated as a floating base rate of 8.05% plus a spread. The bank says the rate can change, so confirm it before you sign.
Is there a processing fee?
UCO lists the Shishu processing charge as nil. You still pay a credit report charge, a guarantee-fund fee and e-signing costs, so the total outgo is not zero.
Do I need collateral?
UCO’s Shishu terms ask for the personal guarantee of the owner, partners or directors, with guarantee-fund cover on the loan. Ask the branch what security applies to Kishor and Tarun.
Which documents are needed for a Shishu loan?
Photo identity proof, proof of residence, two photographs, a quotation for what you will buy with the loan, and any business licence. For the digital route you also need a Udyam certificate and bank statements.
How long can I take to repay?
Shishu is repaid in 12 to 36 monthly instalments with no moratorium. A Kishor term loan runs 12 to 60 months, and a Kishor cash credit limit is reviewed every year.
Can I apply online?
Yes. UCO’s Shishu Mudra page links to its digital MSME loan application, and its Kishor page links to its online loan portal. Your nearest branch can tell you about in-person applications.
