Another big change is going to come in India's digital payment system. Now UPI can be used not only for making payments, but also for taking loans and spending. NPCI (National Payments Corporation of India) has issued a new guideline, under which banks and NBFCs (non-banking financial companies) are now providing their customers the facility to take loans through UPI apps like PhonePe, Paytm, and Google Pay. NPCI has directed to start this facility by 31 August 2025.

What is the new update?

Till now, UPI could be used only for RuPay credit card and some pre-approved loans. But now a big update has come. In which you will also be able to add many types of loans to UPI.

Loan against Fixed Deposit (FD)
Loan against Gold
Loan taken against land or house (property)
Loan based on shares and bonds
Personal and Business Loan
Loan taken from Kisan Credit Card (KCC)
What is the complete process?
Take a loan from your bank or NBFC against FD, gold, property, or any asset. Log in to UPI app. Go to apps like PhonePe, Paytm, or GPay. Link the credit line. Link your loan account to UPI with the permission of the bank or loan provider. Make payment or transfer. Now you can withdraw up to Rs 10,000 daily from this credit. You can send money to any person. You can shop in small shops in which the monthly limit is Rs 50,000.
The bank will check every transaction based on its approval and loan terms. If you have taken a loan for gold, then it may not be possible to spend it anywhere else. The bank will also have its own limits and category settings.

What benefits will you get from this?

Instant access will be available, which means the loan amount can be used from the app itself without going to the bank. Work will be cashless and paperless. There will be no need for net banking or a long process. It will help in business. Payment can be made directly to the supplier or vendor through UPI. It will be beneficial everywhere, in a village or city. Farmers will also be able to make direct payment by joining KCC.

What are its limits?
The transaction should be for the same purpose for which the loan was received. The daily limit of Rs 1 lakh and 20 transactions will remain.

Every bank will permit according to its policy. You cannot buy gold from a medical loan. Payment for shopping or gambling cannot be made from a medical loan.

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