The way we pay and borrow money in India is changing fast. The Unified Payments Interface (UPI) has already made sending and receiving money as easy as a tap on your phone. Now, there’s a new feature making waves: the UPI credit line. This upgrade lets you borrow money instantly for your daily needs, right from your favourite UPI app.
What Is a UPI Credit Line?
A UPI credit line is a pre-approved loan from your bank that you can use directly through apps like PhonePe, Google Pay, or Paytm. Instead of waiting for a loan to be credited to your account, you get a set credit limit. Whenever you need funds, you can use this limit to pay bills, shop, or transfer money, just like you would with your regular bank balance. You repay the borrowed amount later, as per the bank’s terms.
How Is It Different from Credit Cards or Buy Now, Pay Later?
- No physical card is needed; everything happens through your UPI app.
- Set-up is quick and doesn’t require paperwork or extra charges that often come with credit cards.
- Unlike Buy Now, Pay Later (BNPL), which works only at certain stores, the UPI credit line can be used anywhere UPI payments are accepted.
- The facility is offered by trusted banks, not just fintech companies, making it more secure and widely accepted.
Who Can Get a UPI Credit Line?
Right now, only a few banks are offering this service to select customers. Usually, you need a good track record with your bank. If you’re eligible, you might see an offer in your banking or UPI app. To activate, you fill out a simple consent form and agree to the repayment terms. Once approved, your credit line appears alongside your other UPI-linked accounts.
Interest Rates and Repayment
- You pay interest only on what you use, not the entire credit limit.
- Each bank sets its own rates and repayment timelines, which could include interest-free periods or EMI options for bigger spends.
- Unlike credit cards, there are usually no reward points or cashback, but the costs are typically lower and access is faster.
Why Is the UPI Credit Line a Game Changer?
- It makes borrowing simple and accessible, especially for people who don’t have credit cards.
- Perfect for small expenses, emergencies, or when your account balance runs low.
- It helps more people, especially in smaller towns, join the formal credit system.
- For merchants, it means more customers can buy even if they don’t have cash on hand.
Banks can reach new customers with lower costs and less paperwork.
