UPI has made money transfers simple, and now it also allows EMI (Equated Monthly Installment) payments.
Recently, the NPCI (National Payments Corporation of India) launched “Credit Line on UPI” with RBI approval. With this feature, you can pay in EMIs by scanning a QR code.
From 2025 onwards, this option will be available at many banks, covering everything from small purchases to bill payments.
Let’s understand how it works, the benefits, and the step-by-step process.
What is EMI on UPI?
EMI on UPI means you can choose EMI while making payments through a QR code.
Earlier, EMIs were only possible via credit cards or specific apps. Now, banks provide a pre-sanctioned credit line through NPCI’s “Credit Line on UPI.”
How it works:
Scan the merchant QR code.
Enter the payment amount.
Select the EMI tenure (3–24 months).
Confirm with your UPI PIN.
The total amount is then divided into monthly EMIs.
Example: Buy goods worth ₹10,000 on a 6-month EMI. You’ll pay about ₹1,800 per month, including interest.
How Does UPI EMI Work?
- Credit Line: Banks like ICICI and HDFC provide a credit line for UPI, similar to Buy Now, Pay Later.
- Transaction: Scan QR, enter the amount, and choose EMI (3, 6, 9 months, etc.).
- Confirmation: Enter your UPI PIN to confirm the payment. EMIs will appear in your bank app.
Benefits of EMI on UPI
Ease: Pay in EMIs using QR code, no card swipe required.
Convenience: Available instantly for groceries, electronics, travel, and more.
Rewards: Earn UPI rewards plus credit card cashback.
Security: Details are secured with tokenization.
Low Interest: Rates range from 12–18% per annum, cheaper than personal loans.
How to Choose EMI on UPI
Select UPI App: Use BHIM, PhonePe, or Google Pay.
Activate Credit Line: Link a RuPay credit card in your bank app and complete KYC.
Scan QR Code: Scan the merchant’s QR code.
Select EMI: Enter the amount and choose the EMI option. Pick tenure (3–24 months).
Confirm: Enter your UPI PIN to complete the transaction.
Track: Check EMI details in your app.
Time: 1–2 minutes
Limit: Up to ₹1 lakh/day
Precautions
Link only RuPay cards.
Check interest rates and processing fees (2–3%).
Never share OTPs.
Avoid restricted categories (like IPOs or mutual funds).
