Every day, thousands of small business owners across India are using MUDRA loans to turn their entrepreneurial dreams into success stories. Whether you are a street vendor dreaming of your own shop, or a small workshop owner looking to expand, there is money waiting for you - without the hassle of collateral.
Wouldn't you feel more confident taking a MUDRA loan if you knew exactly how much you will need to pay each month? Whether you are planning to take a ₹50,000 loan for your small shop or a ₹5 lakh loan to expand your business, the MUDRA Loan EMI Calculator from Shriram Finance helps you plan your payments better than guessing.
In this article you will discover everything about the EMI Calculator for Mudra loan - from how to use it to how it can help you make better business decisions. You will learn exactly how to calculate your monthly payments for MUDRA loan.
Key Highlights
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What Is a MUDRA Loan?
A MUDRA loan is a type of financial assistance offered by the Indian government under the Pradhan Mantri MUDRA Yojana (PMMY). MUDRA stands for Micro Units Development and Refinance Agency. These loans support micro and small enterprises, as well as individuals looking to start or expand their businesses.
Following is some of the features of MUDRA loans:
- MUDRA loans are available to small businesses, shopkeepers, fruit and vegetable vendors, truck operators, food service units, repair shops, machine operators, artisans, and other micro enterprises.
- One of the main advantages of MUDRA loans is that they don't require collateral, making them accessible to many small business owners who might not have assets to pledge.
- The interest rates on MUDRA loans are generally lower compared to other types of business loans, though they may vary depending on the lending institution.
- MUDRA loans are provided through various channels including public sector banks, regional rural banks, cooperative banks, private sector banks, NBFCs and microfinance institutions.
- Borrowers receive a RuPay debit card, which allows them to withdraw funds conveniently from ATMs, enhancing liquidity for operational needs.
Did You Know? As of March 2023, the MUDRA loan scheme has disbursed over 40 crore loans amounting to ₹23.2 lakh crore since its inception in 2015, significantly boosting India's startup ecosystem. |
Types of MUDRA Loans
The MUDRA loan scheme offers three categories of loans, each designed to cater to different stages of small business growth and financial needs:
Shishu
If you are just starting out, Shishu loans offer an excellent opportunity with the following features:
- Loan amount: Up to ₹50,000
- Target: Micro-enterprises and startups in their earliest stages
- Features:
- Lowest interest rates among MUDRA loans
- Minimal documentation required
- Quick processing and disbursal
- Ideal for:
- Small traders and shopkeepers
- Artisans starting their business
- Home-based entrepreneurs
Kishore
These loans offer a balance between accessible funding and more structured repayment terms, suitable for businesses with some operational history. Kishore loans offer the following features:
- Loan amount: From ₹50,000 to ₹5 lakh
- Target: Small businesses looking to expand operations
- Features:
- Moderate interest rates
- Longer repayment tenures available
- More comprehensive documentation compared to Shishu
- Ideal for:
- Growing small-scale manufacturing units
- Service providers expanding their reach
- Businesses needing to upgrade equipment or increase inventory
Tarun
While these loans require more detailed documentation and business plans, they offer the financial backing needed for substantial growth with the following features:
- Loan amount: From ₹5 lakh to ₹10 lakh
- Target: Established small businesses ready for significant growth
- Features:
- Highest loan amounts in the MUDRA scheme
- Competitive interest rates for larger loans
- Requires detailed business plans and financial projections
- Ideal for:
- Businesses looking to open new branches
- Companies wanting to diversify their product lines
- Enterprises needing substantial equipment or technology upgrades
Each category is designed to meet the evolving needs of businesses as they grow, providing appropriate funding at different stages of development. The loan scheme aims to support the entire spectrum of micro and small enterprises, from nascent ideas to established businesses poised for expansion.
What Is MUDRA Loan EMI Calculator?
A MUDRA loan EMI Calculator is a digital tool offered by Shriram Finance that helps borrowers estimate their monthly loan repayments. It considers factors like loan amount, interest rate, and tenure to provide accurate EMI projections.
Key Benefits of Using a MUDRA Loan EMI Calculator for Startups
For startups and small businesses, the MUDRA loan EMI Calculator offers several advantages:
- Accurate Budgeting: By providing precise monthly repayment figures, the calculator enables startups to plan their expenses with greater accuracy. This precision is crucial for maintaining a healthy cash flow.
- Loan Affordability Assessment: The calculator helps determine the maximum loan amount a startup can manage based on its current and projected financials. This prevents overborrowing and ensures sustainable growth.
- Long-term Financial Forecasting: With the ability to project EMIs over the entire loan tenure, startups can make informed decisions about their long-term financial commitments and growth strategies.
How to Use the MUDRA Loan EMI Calculator
Follow these simple steps to make the most of the MUDRA loan EMI Calculator:
- Step 1: Enter Loan Amount: Begin by entering the desired loan amount. This should align with your business needs and repayment capacity.
- Step 2: Specify Interest Rate: Enter the current MUDRA loan interest rate. Be sure to use the most up-to-date rate for accurate calculations.
- Step 3: Select Loan Tenure: Choose the repayment period that best suits your business plan. Remember, longer tenures mean lower EMIs but higher overall interest payments.
- Step 4: Calculate: Once you have entered all the required information, the tool will instantly display your monthly EMI amount.
By following these steps, you will gain valuable insights into your loan repayment structure, helping you make informed decisions about your MUDRA loan application.
Financial Planning Tips Using the EMI Calculator
Leverage the EMI calculator to enhance your financial planning with these strategies:
- Determine Loan Affordability: Use the calculator to find the maximum loan amount your startup can comfortably repay. Input different loan amounts and compare the resulting EMIs with your projected cash flow.
- Optimise Loan Tenure: Experiment with different loan tenures to find the optimal balance between EMI amount and total interest paid. Longer tenures mean lower EMIs but higher overall interest costs.
- Plan for Business Expansion: Calculate EMIs for larger loan amounts to plan for future business expansion. This helps in creating a roadmap for growth aligned with financial capabilities.
- Compare Different Loan Options: Use the calculator to compare EMIs across different MUDRA loan schemes: Shishu, Kishore and Tarun. This comparison aids in selecting the most suitable loan type for your startup's needs.
- Project Cash Flow: Incorporate the calculated EMI into your cash flow projections. This ensures your startup maintains a healthy balance between loan repayments and operational expenses.
Conclusion
MUDRA loan EMI calculators are more than just tools for calculating repayments. For startups, it's a powerful instrument for comprehensive financial planning. By leveraging this calculator effectively, entrepreneurs can make informed decisions about borrowing, manage their cash flow efficiently, and pave the way for sustainable business growth. Remember, while the calculator provides valuable insights, it's crucial to consider other aspects of your business plan and seek professional financial advice when making significant financial decisions.
