UPI Credit Line: 'Interest-free' loan facility now available like a credit card - Punjabi News

Published on: 21 Jan 2026 at 07:02 AM

UPI Credit Line: ‘Interest-free’ loan facility now available like a credit card

Published by: Gill Bikram

UPI Credit Line now offers credit card-like interest-free periods for users in India. NPCI and banks have introduced this change to boost digital payments, allowing repayment without interest for 30-45 days if paid by the due date.

Key Change: Interest-Free Window
Previously, interest started accruing immediately on UPI Credit Line usage. New rules provide 30-45 days interest-free, similar to credit cards from banks like Karnataka Bank and Yes Bank.

Users can spend up to their approved limit (₹2,000 to ₹60,000) even with zero bank balance. Interest applies only if not repaid by the due date after bill generation.

Core Features
Eligible users have pre-approved bank credit limits, ideal for small businesses or individuals without credit cards.
Transactions limited to merchant QR code scans (P2M payments only).

Separate UPI PIN enhances security; disputes resolvable directly via UPI apps.

Major Benefits
Promotes financial inclusion for those ineligible for credit cards.
Handles daily needs like groceries, bills, or emergencies without physical cards—all via apps like Google Pay, PhonePe, or Paytm.

Builds credit history responsibly without plastic.

Precautions
Late payments harm CIBIL scores, affecting future loans. Post-grace period rates may exceed personal loans.

Check bank-specific terms, as features vary (e.g., up to 45 days interest-free in some launches).