UPI Credit Line Service: Unified Payments Interface (UPI) Credit Line Service is a feature that allows eligible users to access a pre- approved line of credit through UPI-based mobile payment apps. Can. It essentially functions as a short-term or overdraft facility.
This is how it generally works. Here’s the step-by-step process:
How to check eligibility
Users must meet certain eligibility criteria, which may include a good credit score, a history of regular UPI transactions and other factors as determined by the bank or financial institution providing the service.
Selection of UPI app
Make sure that the UPI app of your choice offers line of credit service. Not all UPI apps provide this facility.
Login or registration
If you are already using the UPI app, log in. If not, download the app and register using your mobile number linked to your bank account.
KYC
Fulfill all necessary KYC requirements, which may include providing identity documents and verifying your identity.
Check credit limit
Once your eligibility is verified, the app will decide your credit limit based on your financial history and other factors. This limit represents the maximum amount you can borrow.
Request credit
When you need money, go to the credit line section of the app and request a loan or withdrawal from your available credit limit. Decide the amount you want to borrow.
Approval
The app will immediately assess your request and, if approved, will deposit the requested amount into your linked bank account. This process is usually faster than traditional loans.
Repayment
You will usually have a fixed period of time (for example, 7 days or 30 days) to repay the borrowed amount with interest. Interest rates and repayment terms vary between loan providers.
Automatic deduction
The app can automatically deduct the borrowed amount along with interest from your linked bank account on the due date. Make sure you have enough money to cover the repayments.
Frequency of use
You can use the credit line multiple times within your approved credit limit as long as you repay your previous borrowings on time.
interest and fees
Be aware of the interest rate and any fees associated with the credit line. These may vary depending on the provider and your creditworthiness.
Manage your credit
Keep track of your credit utilization, repayment schedule and outstanding balance through the app. Responsible use of a credit line can help improve your credit score.
It is worth noting that it is important to know about the terms and conditions, interest rates and fees related to the UPI credit line service provided by your chosen UPI app. Also remember that misuse or failure to repay can have a negative impact on your credit history and lead to financial penalties. Always take loan responsibly and as per your capacity.
