UPI Now Pay Later: Instant Credit Lines via UPI – Benefits, Eligibility & How to Apply

Ever wished you could make a UPI payment even if your bank account balance was a little low, and pay for it later? Well, good news! The National Payments Corporation of India (NPCI), the brilliant mind behind UPI, has rolled out a super handy feature called “Pre-approved Credit Lines through UPI.”

Think of it as “UPI Now Pay Later” – a way to get instant credit right through your everyday UPI apps. This isn’t just a small change; it’s a big step forward in how we use digital money in India. It means UPI isn’t just for spending your own money anymore, but also for using pre-approved credit when you need it.

Let’s break down what this new power-up for UPI means for you, how it helps, if you can get it, and how to set it up!

What is “UPI Now Pay Later” (Pre-approved Credit Lines via UPI)?

Normally, when you make a UPI payment, money is instantly taken from your linked bank account. But with “UPI Now Pay Later,” you get a special “credit line” (it’s like a small, ready-to-use loan) that a bank or a lending company (NBFC) has already approved for you.

When you’re ready to pay with UPI, you can choose to use this pre-approved credit instead of your bank account balance. So, you complete your purchase or payment right away, and you pay back the credit amount later, according to the terms set by the lender.

NPCI officially launched this feature to make UPI even more powerful and useful, especially for those moments when you need a bit of extra financial flexibility. 

How is “UPI Now Pay Later” Different from a Credit Card?

While both offer you credit, there are key differences:

• Underlying Product: A credit card is a distinct financial product, often physical, with its own billing cycles, reward points, and interest structures. “UPI Now Pay Later” uses a credit line, which is essentially a pre-approved amount of money you can borrow. It’s linked directly to your UPI ID, not a separate card number.
• Linking: You can link RuPay Credit Cards to UPI and use them directly. However, “UPI Now Pay Later” is about linking a credit line (like a digital, flexible loan) to your UPI, which isn’t necessarily tied to a physical card.
• Purpose: Credit cards are general-purpose credit tools. Credit lines via UPI are often aimed at providing immediate, flexible credit for day-to-day transactions within the UPI ecosystem, sometimes with simpler onboarding for existing bank customers.
• Convenience: The credit line integration into UPI means you use your existing UPI ID and PIN, without needing to enter credit card details.

Why “Pay Later” on UPI is a Game-Changer

This new way of using UPI brings a lot of perks:

1. Instant Money Access: Once you’re approved for the credit line, it’s ready to use instantly with your UPI app. No waiting for a physical card to arrive or activating new accounts.
2. Super Easy to Use: It works just like paying from your bank account. You scan a QR code, enter a UPI ID, or use a mobile number, and then simply choose your credit line as the payment source. That’s it!
3. Pay Almost Anywhere: UPI is accepted everywhere in India – from your local chaiwala to big online stores. This means your credit line is also accepted almost everywhere, giving you amazing flexibility.
4. Flexible Paying Back: The bank or lending company that gives you the credit line will have clear rules on how and when you need to pay it back. This is often flexible, similar to how personal loans or credit cards work.
5. Go Fully Digital: The whole process, from applying to using and paying back, can be done online or through your phone. Less paperwork, more convenience!
6. More People Can Get Credit: This feature helps bring formal credit to more people who might not have a credit card but are good at managing their money. It’s a step towards making credit more accessible in India.
7. Smarter Spending: It gives you more control over your immediate cash flow. If an unexpected expense comes up, you can use your credit line and manage your cash in your bank account for other needs.

Who Can Get It? (Eligibility Made Simple)

The “Pre-approved Credit Line” isn’t a free-for-all; it’s credit, so lenders need to know you can pay it back. The rules are set by the banks and lending companies (NBFCs) that actually give you the credit. Here are the common things they look at:

• Your Credit Score: This is like your financial report card. A good credit score (like a CIBIL score) shows you’ve borrowed and paid back money responsibly in the past.
• Your Income & Job: Lenders will check how much you earn and how stable your job is to make sure you have enough money coming in to repay the credit.
• Your Relationship with the Bank: If you already have a bank account or other services with a bank, they might be more likely to offer you a pre-approved credit line as they know your financial history.
• KYC (Know Your Customer): Your bank account must have all your identification documents (like Aadhaar, PAN) updated and verified.
• Your Age: You need to be at least 18 or 21 years old (depending on the lender’s rules) to get credit.
• Other Rules: Each bank or lender might have its own extra rules, so it’s always good to check with them.

How to Get Your “Pay Later” Credit Line for UPI

Getting this credit line mostly depends on the bank or lending company. But here’s a general idea of how it works:

1. Look for Offers from Your Bank/Lender:
   • Check Your Bank App/Website: Log in to your bank’s mobile app or internet banking. Many banks will show you “pre-approved” offers for credit lines, personal loans, or similar products if you qualify.
   • Notifications: Your bank might send you an SMS, email, or a notification in their app if they have an offer for you.
   • UPI App Partners: Some popular UPI apps (like Paytm) might also partner with lenders and show you credit offers directly within their app. Look for sections like “Loans” or “Credit.”

2. Accept the Offer & Finish Paperwork (Digital Style):
   • If you see an offer you like, read all the details carefully! Understand the interest rates, how long you have to pay it back, and any fees.
   • If you agree, you can usually accept the offer digitally through their platform.
   • You might need to do a quick digital verification (e-KYC) or sign some agreements online.

3. Link Your New Credit Line to UPI:
   • Once your credit line is approved and ready, you’ll connect it to your UPI app, just like adding a bank account.
   • Open your favorite UPI app ( Paytm, or your bank’s UPI app).
   • Go to the “Bank Accounts” or “Payment Methods” section.
   • Look for an option like “Add Bank Account” or specifically “Add Credit Line” / “Add Pre-approved Credit.”
   • Select the bank or lending company that gave you the credit line.
   • Your new credit line should appear, and you’ll likely confirm it with an OTP sent to your registered mobile number.

4. Set Your UPI PIN:
   • For security, you’ll probably need to create a special UPI PIN for this credit line. You’ll use this PIN every time you make a payment using the credit.

And voilà! Once linked, your pre-approved credit line will show up as a payment option whenever you pay with UPI. Just select it instead of your bank account!