Loan terms

Stand-Up India loan amount, margin money, interest and repayment

ऋण राशि, मार्जिन मनी, ब्याज और चुकौती

A Stand-Up India loan is above ₹10 lakh and up to ₹1 crore and can cover up to 85% of your project cost. You arrange the rest, called the margin money, and at least 10% of the project cost must be your own money. Interest is capped at the bank’s MCLR plus 3% plus a tenor premium. You repay over up to 7 years, including a moratorium of up to 18 months.

Loan terms in one table

Sources: PIB, 11 November 2026; DFS scheme page; scheme features.

Loan size: above ₹10 lakh up to ₹1 crore

The 2026 Cabinet approval describes the loan as “above Rs. 10.00 lakh and upto Rs. 1.00 crore”. Older scheme pages say “between ₹10 lakh and ₹1 crore”. The practical meaning is the same: the scheme is for loans larger than ₹10 lakh, and the maximum is ₹1 crore.

The loan amount follows from your project cost. A ₹30 lakh project can get a loan of up to ₹25.5 lakh, which is 85%. A project needs to cost at least about ₹11.8 lakh before 85% of it goes above ₹10 lakh. Smaller projects usually fit Mudra or PMEGP better.

Composite loan or term loan

A composite loan combines two things in one sanction:

• a term loan for fixed assets such as machinery, equipment, furniture or a vehicle
• working capital for raw materials, stock, wages and day-to-day costs

The 2026 approval allows either a composite loan or a term loan alone. Most first-time businesses need both, so ask the bank to assess your working-capital cycle as well as your assets.

Working capital up to ₹10 lakh may be given as an overdraft, and the bank issues a RuPay debit card so you can draw it easily. Above ₹10 lakh, working capital is given as a cash credit limit.

Up to 85% of project cost

The loan is expected to cover up to 85% of the project cost. The scheme adds an exception. The 85% figure does not apply if your own contribution plus support from other schemes is more than 15% of the project cost. In that case the loan simply fills the gap that remains.

Margin money: up to 15%, at least 10% your own

Margin money is the part of the project cost that the bank does not lend. Under Stand-Up India it is up to 15%. Since the Budget 2021-22 change, this is down from up to 25% earlier.

Two rules work together:

1. The margin can be met partly through convergence with eligible central or state schemes, such as a state subsidy or a margin-money loan from a state SC/ST or women’s development corporation.
2. In every case you must bring at least 10% of the project cost as your own contribution.

So for a ₹40 lakh project, the margin is ₹6 lakh. At least ₹4 lakh must be yours, and up to ₹2 lakh can come from another scheme.

The official guidelines give an example. If a state scheme gives a borrower 20% of the project cost as a subsidy, the borrower must still contribute at least 10%. In that case the bank loan is only 70%.

What happens to a subsidy that arrives later

• A subsidy that was not expected when the loan was appraised, but arrives later, is credited to the loan account.
• A subsidy that was counted at appraisal but reaches you only after the unit starts may be released to you to repay any loan you took to arrange the margin money.

Interest rate

The scheme does not fix one interest rate for every bank. It sets a rule: the rate is the lowest applicable rate of the bank for that rating category, and it must not exceed the bank’s base rate (MCLR) + 3% + tenor premium.

What this means for you:

• Different banks have different MCLRs, so rates differ.
• Within a bank, a better credit rating for your project gets a lower rate.
• The 3% plus tenor premium is a ceiling, not a fixed add-on.

Ask each bank for its current MCLR and the spread it would charge your project, and compare the offers. On standupmitra.in you can name preferred banks, and any bank can pick up your application.

Repayment and moratorium

The loan is repayable within 7 years, with a maximum moratorium of 18 months. The moratorium is the starting period when the unit is being set up and instalments have not yet begun. The bank fixes the actual period based on the nature of the activity and the useful life of the assets bought with the loan, so it can be shorter than 7 years.

Fees and other bank requirements

The scheme guidelines allow banks to set requirements such as stock statements, insurance of the assets created, and reasonable processing fees. Ask for the fee schedule in writing before you sign. If the loan is covered by the credit guarantee, the 2026 approval sets a standard guarantee fee of 0.50%. See how CGSSI works.

For composite loans up to ₹25 lakh, the bankers’ FAQ says a techno-economic viability report may not be insisted upon. Larger projects should expect a full appraisal.

Margin-money calculator

Enter three amounts, all in rupees. The result is the largest loan the 85% cap and the ₹1 crore cap would allow for that project.

1. Project cost (₹): the full cost, including machinery, setup and initial working capital.
2. Your own contribution (₹).
3. Support from other schemes (₹), such as a subsidy or a margin-money loan. Enter 0 if none.

You get:

• the minimum own contribution (10% of project cost)
• margin money at 15%
• the largest loan at 85%, capped at ₹1 crore
• the indicative loan for your figures, as a share of project cost
• any extra funds you still need to arrange
• a clear status: fits the scheme, own contribution too low, margin short, above the ₹1 crore cap, or below the ₹10 lakh range

The result is indicative. The bank appraises the project and fixes the actual loan.

Worked examples

How the loan is released

Banks usually release a term loan in stages against the assets being bought, often by paying suppliers directly, and set up the working-capital limit when the unit is ready to trade. Ask the branch how and when each part will be released, so your supplier orders and premises are ready in time. Your margin money is normally expected before or with the first release.

Keep the receipts for everything you buy with the loan. The bank may ask to inspect the assets, and the bills also help if you claim a subsidy from another scheme later.

Before you accept a sanction letter

Read the sanction letter line by line and check these points:

• the loan amount, split between term loan and working capital
• the interest rate, and how it is linked to the bank’s MCLR
• the repayment period and the length of the moratorium
• whether the loan is covered by the CGSSI guarantee or by collateral
• the processing fee, the guarantee fee and the insurance you must buy
• the margin amount you must deposit before the first disbursement

If anything differs from what you were told, ask the branch to explain it in writing before you sign.

FAQ

What is the interest rate of a Stand-Up India loan? There is no single rate. It is the bank’s lowest rate for your rating category, capped at the bank’s MCLR + 3% + tenor premium.

How much margin money is required for Stand-Up India? Up to 15% of the project cost, of which at least 10% must be your own money.

Can a subsidy count towards margin money? Yes. Support from eligible central or state schemes can make up part of the margin, but not your minimum 10% own contribution.

What is the repayment period? Up to 7 years, including a moratorium of up to 18 months.

Is there a subsidy in Stand-Up India? No. The scheme itself gives a loan, not a subsidy. You can combine it with other schemes’ subsidies. See the scheme comparison.

Can I get exactly ₹10 lakh? The 2026 wording is “above ₹10 lakh”, so the loan must be more than ₹10 lakh.

Can I buy land with the loan? Not for a trading business. For a manufacturing or service project, the bankers’ FAQ says land may be considered case by case if it is part of the project plan.

Next: check eligibility or read how to apply. Back to the Stand-Up India overview.

Last reviewed: 12 November 2026.