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Mudra Loan Calculator

Mudra loans are collateral-free for micro-businesses. Shishu (≤ ₹50k), Kishor (₹50k–₹5L), Tarun (₹5L–₹10L), Tarun Plus (₹10L–₹20L). Rates vary 8-12% depending on bank.

₹5,00,000
10.0%
5 years
Category
Kishor
Monthly EMI
₹10,624
Total interest₹1,37,411
Total repayment₹6,37,411

How Mudra (PMMY) loans work

PMMY is a refinance facility from MUDRA Ltd (a SIDBI subsidiary) to scheduled commercial banks, RRBs, MFIs and NBFCs, who in turn lend collateral-free to micro and small businesses. Four buckets: Shishu ≤ ₹50,000, Kishor ₹50k–₹5L, Tarun ₹5L–₹10L, Tarun Plus ₹10L–₹20L (added in Budget 2024). No collateral is required by RBI guidelines, but lenders often ask for hypothecation of business assets or a guarantor for amounts above ₹2L. EMI uses standard reducing-balance formula at the bank's prevailing MCLR-linked rate.

Worked example

Tarun bucket: ₹8,00,000 for 5 years at 10% — EMI = ₹16,998/month, total interest ₹2,19,872. Same loan at 12% (typical NBFC rate) bumps EMI to ₹17,797 and adds ₹47,840 in interest. For Shishu loans (₹50k), interest rates are often subsidised by state schemes; a kirana store taking ₹50k for 3 years at 8% pays ₹1,567/month — affordable for a shop turning over ₹50k/month in sales. Documentation is light: KYC + business proof + 6-month bank statement, no balance sheet for Shishu.

When to use this

  • Funding a kirana shop, beauty parlour, tailoring unit, dairy or auto-driver purchase
  • First-time entrepreneurs who lack collateral but have a steady micro-cashflow business
  • Working capital top-up for an existing small business invoiced via UPI / Bharat QR

For broader business loan sizing see the loan eligibility tool, and compare repayment math with the EMI Calculator.

FAQ

Are Mudra loans truly collateral-free?

Yes for Shishu and Kishor. Tarun (₹5L+) may need primary security (the asset funded by the loan). Personal guarantee from the borrower is standard. CGTMSE coverage backs the bank against default.

Can I use a Mudra loan for personal expenses?

No — strictly for business / income-generating activity. Bank verifies via business plan, GST/Udyam registration. Misuse can lead to recall and CIBIL hit.

What rate should I expect?

Public sector banks: 8.5-11%. Small finance banks / NBFCs: 11-15%. PSL refinance via MUDRA bank lets PSBs offer low rates, but underwriting is conservative.