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Now the need to go to the bank is gone. All credit for loan will be available through UPI APP. New facility became operational in many banks from 6th December.

Sandy Verma | December 9, 2024 6:24 PM CST

Money can be needed anytime and anywhere. If you do not have a credit card, then there is no need to panic now. Now you can take a small amount loan instantly through UPI present in your phone. The Reserve Bank of India (RBI) has allowed this facility, which can provide great relief to the common people, small businesses and people living in rural areas. Let us know how this feature works.

Participation of Small Finance Banks

RBI has allowed Small Finance Banks (SFBs) to provide credit lines to their customers after the monetary review meeting of 6 December. With this, customers of Small Finance Banks like AU Small Finance Bank, Equitas Small Finance Bank and Ujjivan Small Finance Bank will also be able to avail this service.

What is UPI Credit Line?

It is a new financial product designed by National Payments Corporation of India (NPCI), which allows customers to access pre-approved credit lines. This service is primarily for users whose UPI accounts are linked to their Small Finance Bank. UPI Credit Line works like a digital credit card, allowing you to spend up to a specified limit. You are required to repay the loan amount immediately after the transaction, which can be repaid in installments or by the end of the billing cycle.

Who will benefit?

Small Businesses and Micro Entrepreneurs: They will get the benefit of easy and cheap financing.
People from rural and small towns: Those who had less access to banking facilities can now use this service.
Without credit card: Those who do not have a credit card can take an instant loan through UPI.

How to get loan?

The process of using UPI Credit Line is very simple:

Download the UPI app on your phone.
Select the option of “Credit Line”.
Select your bank from the drop-down menu.
The details of the credit line will be visible on the mobile number linked to your bank.
Link credit line account and generate UPI PIN.
Now you are ready to avail loan and transact instantly.

things to note

Use UPI Credit Line only when really needed. Be prepared to repay the loan amount in advance, as it is like a digital credit card. Avoid taking more loan than required so that there is no problem in repayment later.

Note: This information is to increase your financial knowledge. For any financial decision, take the decision only after gathering information yourself.