Understanding Credit Line on UPI and How to Use It

UPI makes sending money super easy. But what if your bank account balance is low? You don’t need to dip into your savings. That’s where the credit line on UPI helps. It’s a new feature backed by the RBI. 

It lets you borrow small amounts instantly through your UPI app and pay merchants without touching your main bank account. You can repay later as per the terms set by your bank, making everyday payments smoother and stress-free.

What is Credit Line on UPI?

A credit line on UPI is like a digital loan linked to your UPI app. It’s offered by your bank and works with apps like Google Pay, PhonePe or Paytm. You use it just like your bank account at checkout. But the money comes from a credit line, not your own balance. It’s like having a virtual credit card.

Right now, this feature is only for merchant payments. You can use it for QR codes and online shopping, not for sending money to friends.

Where Can You Use Your UPI Credit Line?

Currently, you can use the credit line on UPI facility for:

• Paying through merchant QR codes
• Shopping on e-commerce websites that accept UPI
• Bills, subscriptions and other business-to-consumer payments

Peer-to-peer transfers and certain spends like investments or fund transfers are not allowed using the UPI credit line.

Benefits of Credit Line on UPI

Here’s why many users are excited about the UPI credit line feature:

• Instant access to funds: No need to apply for a new loan each time. Once linked, you can use the credit line as easily as making a UPI payment.
• Flexible repayment: Depending on your bank, you can repay in full or convert the spend into EMIs.
• Separate from savings: Keeps your own account balance untouched while allowing you to spend responsibly.
• Better tracking: Repayments are visible within the UPI app. This makes it easy to stay on top of dues and limits.

How to Apply for a Credit Line on UPI?

Setting up is easy if your bank has already pre-approved a credit line for you. Here’s how it works:

• Step 1: Open your UPI app and look for the option to link a credit line
• Step 2: Choose your bank and verify your mobile number
• Step 3: If you’re eligible, your credit line will appear on screen
• Step 4: Set a separate UPI PIN for the credit line account
• Step 5: Start using it for QR or e-commerce merchant payments

Not everyone may see this option yet. The rollout depends on your bank and UPI app.

Security and Repayment for Credit Line on UPI

Just like with regular UPI transactions, security is strong:

• You set a unique UPI PIN for this credit line
• Banks send OTPs and alerts for every transaction
• All credit and repayment details are visible inside your UPI app

You can repay the credit through AutoPay (UPI mandate) or by making a manual payment to your UPI credit ID. Just make sure to pay on time, as late payments could hurt your credit score.

Key Dos and Don’ts when using UPI Credit Line 

To stay safe while using this feature, keep these points in mind:

DO’s	DONT’s
Use the credit line only for authorised merchant payments	Don’t use the same UPI PIN as your savings account
Regularly check your balance and due dates	Never share your OTP or PIN with anyone
Set up AutoPay for smooth repayments	Avoid exceeding your assigned credit limit
Keep your mobile number updated with your bank	Don’t use it for non-permitted categories

Now that we know what is credit line on UPI and how it works, it’s easy to see why it’s so useful for quick merchant payments. You can spend without using your savings. Having said that, if you ever need more funds than your approved UPI credit limit, Fibe can help. 

Apply for a Personal Loan with Fibe online and get up to ₹5 lakhs in your bank account. No paperwork. No collateral. Just quick approval and instant disbursal within minutes. Download the Fibe App now to get started!

FAQs on Understanding Credit Line on UPI and How to Use It

Can I link multiple credit lines to my UPI account?

Yes, you can link multiple credit lines to a single UPI ID. Each credit line is tied to a different bank or financial institution. This lets you choose which limit to use for a transaction, giving you more flexibility depending on your spending needs.

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

The charges depend on the bank offering the credit line. Some banks may apply interest or a small processing fee. It’s best to check with your bank for the exact details before using it.