How To Get Your Own Credit Line Set Up

The festive season is upon us, and that means that a season of parties, family celebrations, engagement and wedding parties, Diwali catch-ups and a whole lot of other social events are on the horizon. You love this time of the year, and are looking forward to being with your friends and family after a series of lockdowns shut down your social life for over a year.

But social events also need you to look and feel your best, and you need to shop for new clothes, shoes, accessories, perfumes, makeup, and so on. This requires money that you don’t have — but who says you need to pay right away when you shop? We recommend browsing through your favourite online brands like Myntra, Amazon and Flipkart to get the best deals, and pay at your convenience.

But first, do set up a credit line with a reputed loan app. Next, start shopping for the clothes and other items that you need.

What is a line of credit?

A line of credit is a sum of money approved for your use by a lending institution. Usually, banks offer line of credit to businesses for their daily operational needs. However, leading loan apps in India have lately started approving credit lines for salaried individuals with a good credit score. It works exactly like a line of credit for businesses, except that it is used by individuals for their personal needs.

The line of credit is replenished by repaying the borrowed money from your salary every month. This keeps the revolving line of credit at your disposal whenever you need the funds, without you having to dip into your savings or borrow a large personal loan. The line of credit lets you borrow just as much as you require, whether to fund a personal purchase or pay for a wedding or medical treatment.

The line of credit is set up based on your:

• Credit score
• Income
• Repayment history
• Set of documents

What is a credit line loan?

It automatically follows that if you have a credit line set up with a leading loan app on your phone, you can avail of a loan from that line. This loan is known as a ‘credit line’ loan.

The credit line loan is a sum of money borrowed against your available credit limit. You can borrow a series of such loans for both personal & shopping purposes.

The lender charges interest only on the amount of loan borrowed, and not the entire credit line availed. In this sense, this type of loan varies from the personal loan, which charges interest on the entire borrowing. Also, you can borrow several credit line loans at the same time, but you can borrow only one personal loan at a time.

How to set up the line of credit

Setting up the line of credit is easy, but you need the right lending app on your phone. Start by installing the preferred app from the Google Play Store (for Android users) or the Apple App Store. Set it up as directed to get started.

The app now checks your credit score and documents before approving your credit limit, say Rs 3,00,000. This means that you can borrow small loans against the available credit limit until it is completely exhausted. However, you can repay the small loans incrementally to keep the credit limit viable and always at your disposal when required.

How to use the shopping credit loan

After installing the app and getting the credit limit set up, look for the credit line product and browse it to know its features and benefits. Once set up, you can use it to shop online whenever you wish.

• Click on the ‘Shop’ icon. Under this, you will find your preferred brand such as Myntra or Flipkart.
• Choose the ‘Myntra online shopping’ loan in the featured list.
• The app checks the request and approves the loan in the form of a Myntra gift card or voucher. This card or voucher may be redeemed on the Myntra website when you shop, at the checkout stage. You are free to shop across various categories of products on Myntra online shopping within the loan amount limits. Most categories of shopping loans levy 0% interest, based on the partner merchant that the app has an association with.
• Take delivery of the purchased products without actually spending a single Rupee upfront when shopping online. You can repay the shopping loan in a series of EMIs that are convenient and easy on your pocket.

Conclusion

A line of credit helps you savour the joy of the festive season — buy what you need, when you need, and pay for it later.