UPI Credit line: Benefits, Do’s & Don’ts, and Process to Apply

byDilip PrasadJuly 11, 2024
"Pre-sanctioned Credit Line at Banks through UPI" is a financial service that transforms lending by providing individuals and businesses with access to pre-approved credit lines from their banks.
UPI Credit line

Suppose you are carrying out a crucial transaction with your UPI account but figure out you do not have sufficient balance in your account. In 2023, the Reserve Bank of India (RBI) launched a solution to this problem. You can now activate the UPI credit line on your UPI account and pay the necessary amount up to the credit line limit.

Table of Contents Show
  1. What is the Credit Line on UPI? 
  2. Benefits of Credit Line on UPI
  3. How to Apply for a Credit Line on UPI?
  4. Do’s and Don’ts for credit line on UPI
  5. Banks that Offer UPI Credit Lines

To activate this overdraft facility, your bank will charge you a one-time processing fee. Interest is levied depending on the days you take to repay, which may differ from bank to bank. However, because it is an overdraft facility, the interest rate is higher than a personal loan.

To understand how you can apply for UPI credit line, read this blog thoroughly: 

What is the Credit Line on UPI? 

“Pre-sanctioned Credit Line at Banks through UPI” is an innovative financial offering designed to revolutionize the lending landscape. It is a facility that empowers the individuals as well as business institutions to have access to pre-sanctioned credit lines from their respective banks.

The incorporation of a credit line to the user’s UPI account eliminates the need to carry multiple credit cards; it has digitized the complete process.

If you use a credit card, the user’s UPI app will be linked to a credit line, indicating that all debits are reflected in your loan account rather than your savings account. 

Benefits of Credit Line on UPI

This remarkable feature is launched to expand the scope of UPI through the inclusion of credit lines. Following are the benefits of credit line in UPI

  • Seamless Linking: To link your UPI account, utilize your registered number to find out your credit line from your bank. 
  • Secure authentication: A UPI pin is used to authenticate any transaction through a credit line, securing and preventing any unauthorized access. 
  • Credit line details: Users have access to information regarding credit line status, utilization of credit line, and details on existing EMI through your UPI app.
  • Conflict resolution: Any conflict that may occur can be resolved with the ODR (UPI Help) reflected on your UPI apps. This ensures improvised user experience and transparency.
  • Transaction variety: Execute payments exclusively to merchant QR codes and e-commerce businesses via credit line on UPI.
  • Enhanced purchasing power: Credit line on UPI opens the gate to seize opportunities and carry out high-end transactions hassle free as the immediate financial resources are exceeded. 
  • Inclusion: No physical credit or debit card is required to avail this facility, ensuring inclusivity. 

How to Apply for a Credit Line on UPI?

Let us examine the steps required to activate the credit line on your UPI application.

Step 1: You can visit your bank or apply online for a credit line on UPI. You will be required to fill a formal application form along with documents such as income statement, address proof and identity proof. To be eligible for this facility, one must be an Indian citizen aged 18+, having a valid PAN and Aadhaar, and having your mobile number linked to Aadhaar.

Step 2: The respective bank will review your application and documents to determine your creditworthiness and credit limit. Once your application is approved, you will be notified by the bank. 

Step 3: If your application is approved by the bank, you now only need to link it to your UPI app. Click on ‘Add Credit Line’ and choose your bank to link the two together. 

Step 4: Once the credit line is linked to your UPI account, you can start availing the overdraft facility to make payments. The same credit limit as your bank account will be available for transactions with the merchants. 

    Do’s and Don’ts for credit line on UPI

    Do’s

    • Set a unique pin for the ‘credit line on UPI’ to enhance security.
    • Make payments only to: Merchants QR code and E-commerce merchants.
    • Set ‘UPI Autopay’ to optimize the payment process and for instant credit line bill payments.
    • Always keep your mobile number updates with your bank before linking credit facility to UPI
    • Before any transaction, Keep a check on your balance and outstanding amount of UPI. 

    Don’ts

    • Do not share your UPI pin with anyone, it leads to unauthorized access to your account.
    • Avoid using the same pin as your savings account for the credit line on UPI, try to keep a unique pin.
    • While registering, you will receive an OTP, refrain from sharing that to anyone.
    • Make sure to check all the information before linking and do not ignore the credit line guidelines, comply with the rules of financial institutions. 
    • Do not exceed the credit limit assigned to you by your bank.
    • Try to avoid any delay in the credit line repayment as it may negatively impact your credit score.

    Banks that Offer UPI Credit Lines

    Following are the banks and UPI apps that provide credit line on UPI facility:

    Credit line on UPI is a solution to the immediate financial crisis that may occur to both credit card holders and non-credit card holders. This will increase the credit worthiness of the user and fosters the customer loyalty as merchants can now offer a seamless payment process. It contributes to a positive and efficient customer experience.

    FAQs

    How does a credit line through UPI work?

    You can now link your credit card to a UPI account to avoid carrying multiple cards. This will help you in QR code and e-commerce merchant transactions. Credit line on UPI can enhance the purchasing power of a customer.
    Yes, You can link multiple accounts to one UPI ID. Pre-approved credit lines make your payments more convenient and accessible.

    Do I need to pay any fees to apply for a credit line in UPI?

    Yes, the banks charge you a one time processing fee when you want to initiate the process of linking your credit card to your UPI. However, the fee amount depends on your financial institution.

    How long is the processing time for a credit line in UPI?

    The process may take 2-4 weeks. Once you submit your application and required documents to the bank, the bank verifies your application and notifies you if it is approved.

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