UPI has completely transformed the way payments are made in India. Transferring money from one mobile number or UPI ID to another has become quick and easy.
Now, the UPI Credit Line is emerging as a useful tool for meeting short-term credit needs, especially for those who don’t have a credit card or can’t get a personal loan.
This facility, introduced by the RBI, is designed to help more people access credit easily.
What is UPI Credit Line?
UPI Credit Line is a type of loan that a bank pre-approves for a customer. It can be accessed through UPI-enabled apps like PhonePe, Google Pay, Paytm, and others.
Unlike traditional loans where the bank transfers the full loan amount to your account, in a UPI Credit Line, you withdraw only what you need from your approved credit limit. You can repay the amount later using UPI.
How is UPI Credit Line different from a Credit Card?
Both the UPI Credit Line and credit cards allow you to spend money that isn’t currently in your account.
But the key difference is that you don’t need a credit card for a UPI Credit Line. It is directly offered by regulated banks and is linked to your UPI account.
Who Can Use This Facility?
Currently, major banks like HDFC Bank, ICICI Bank, and Axis Bank are offering this service.
They provide it to select customers based on their credit score and financial history. If you’re eligible, you may see a pre-approved offer in your bank’s mobile app or your UPI app.
To open a UPI credit line:
Fill out a digital consent form
Agree to the repayment terms
Once approved, your credit limit will show up in your UPI account
How Much Interest Is Charged?
Since this is a short-term credit option, interest is charged only on the amount you actually use, not on the full credit limit.
The interest rate and repayment period are set by your bank, depending on your credit profile.
Some banks offer a short interest-free period, while others allow repayment through EMIs for larger expenses. This makes it flexible and easier to manage for users.
