Razorpay

Line of Credit

(LOC) is a convenient working capital solution offering flexible repayment options for a 12 month tenure. You can choose your repayment tenure and pay interest only on the amount you have withdrawn via equated monthly instalments (EMI), at your own pace and in control.

You can cover all of your planned and unexpected financial outflows with a Line of Credit and withdraw funds from your assigned credit limit conveniently. Explore the following about Line of Credit:

Use Cases

Businesses often need capital to cover expenses and cash flow gaps, like paying festive bonuses, repairing old equipment and more.

If your business is seasonal in nature, a Line of Credit can cover business operation costs in such time.
For inventory purchases where you can avail discounts when you make bulk purchases, a Line of Credit can be helpful.
For short-term plans like marketing campaigns, product launches, festive bonuses and more, you can withdraw from your Line of Credit.
In case of a business emergency or when the cashflow situation is tight, you can use a Line of Credit to withdraw funds instantly.

To cover all such situations and more, you can withdraw any amount from your available credit limit. Know how else you can

use a Line of Credit

Advantages

Here are some advantages of using Razorpay's Line of Credit:

Fixed Due Date
Pay EMIs on one fixed due date, no matter when in the month you have withdrawn. This induces better financial planning as you need not check if you have sufficient balance in your account for every different due date.
Automated Collection
The EMI amount is auto-debited from your account balance on the 5th of every month. You just need to ensure there are enough funds to make the repayments. You can also make
manual repayments
as you wish. RazorpayX reminds you as you approach the due date.
Flexible Withdrawal and Repayment
Withdraw the necessary amount on any day of the month. Repay in monthly instalments as per your business needs.
No Additional Costs
There is no processing fee, no pre-closure charges or any other hidden charges when availing Line of Credit. You repay only the principal amount borrowed along with the interest payable on the due date.

How it Works

Here is how the application process for Line of Credit works:

Visit the
Line of Credit
page.
1. Enter your mobile number and complete the OTP verification process.
2. Enter your name to create an account with Razorpay. You are then redirected to the LOC application form.
Enter the necessary details required to complete the Line of Credit application.
1. Provide business and personal details applicable as per your business type.
2. Authorise Razorpay as a representative to conduct a credit check from CIBIL/Experian.
3. Submit the form.
After we receive your details, we perform a credit verification and eligibility check.
1. At this stage, you must either:
  - Manually upload your bank account statement.
  - Upload bank account statement through netbanking via Perfios.
2. We process and review your details, and ask you to confirm your email.
Based on your eligibility, we evaluate an offer for you and show the sanctioned credit limit.
After you have accepted the offer, submit your KYC details and sign the relevant agreement documents.

Watch Out!
Currently, Line of Credit is only available for registered businesses.

You can now log in to your

RazorpayX Dashboard

and:

Withdraw funds
from your line, 24/7.
Choose the tenure within which you want to repay the withdrawn amount, including the interest accumulated.
Repay your withdrawals
in two different ways, or pre-close withdrawal.

Calculations & Charges

Before you withdraw the amount from your available credit limit, take a look at:

The interest and EMI date calculations.
The applicable and non-applicable charges.

Handy Tips

All interests (broken period, delayed interest, EMI interest) and EMIs are rounded to the nearest rupee. This adjusts the principal to a rounded off amount.

Calculations

Following are the calculations applicable for the withdrawals.

EMI Due Date

Suppose the credit line is open to you from 1st January 2023. The EMI due date is calculated in the following way:

Withdrawal Date	Before 15th?	Due Date	Reason
10th Jan 2023	Yes	5th Feb 2023	Withdrawal was made before the 15th of the withdrawal month. Pre-EMI is not applicable.
30th Jan 2023	No	5th Mar 2023	Withdrawal was made after the 15th of the withdrawal month. Pre-EMI is applicable.

In the second case when the withdrawal date is 30th Jan 2023, a pre-EMI is applicable. You can calculate your EMI using our

EMI Calculator

Pre-EMI

The pre-EMI is an interest charged when the withdrawal date is after the 15th of the month. It is visible in the adjustments (shown using ⓘ) of the interest payable when paying the EMI, as shown.

If you are unable to pay the pre-EMI when repaying the EMI due on the due date, the outstanding amount, that is principle + interest + pre-EMI, will incur

delayed interest

charges.

Delayed Interest

Delayed interest is an overdue charge that you must pay in case you do not pay your EMI on the due date. This interest is charged on a daily basis on the outstanding EMI amount.

Delayed Interest

(Instalment outstanding as of due date)
x (Delayed interest%)
x (DPD for the corresponding EMI)

Total Instalment Outstanding

Total EMI due + Delayed interest

Charges

There are no additional or hidden charges applicable when you withdraw from the Line of Credit.

However, overdue charges are applicable when you are unable to pay your EMIs on the due date. The interest accrued is shown on the right pane of the

withdrawal summary

with ⓘ and it is inclusive of the overdue charges when you view it after the due date.

tooltip icon that shows overdue charges when hovered over

Withdrawal Workflow

In the Line of Credit product, you make withdrawals from the available credit limit. Following is the status flow for the withdrawal and repayment process:

Status	Description
`initiated`	When you request for a withdrawal on your Dashboard, the withdrawal is in this status.
`processed`	After requesting the withdrawal, our lending partner, Gromor, acknowledges it and Razorpay prepares an EMI plan in this status.
`disbursed`	When the funds requested are available in your account, the withdrawal reaches this status.
`partially repaid`	If you repay less than total due amount when repaying a withdrawal , this is the status.
`repaid`	If you have completely repaid the withdrawn amount in full, the withdrawal status is in `repaid` .
`overdue`	If you have not paid the EMI amount after the due date, this is the status. You cannot make further withdrawals unless the EMI is paid.
`failed`	If your EMI repayment had failed, this is the status. This happens usually due to unavoidable server downtimes. Retry making the EMI payment. Contact support from the Dashboard for any queries.

You can always filter your EMIs basis their status using the Quick Filters menu, as shown.

Quickfilters menu on the RazorpayX Line of Credit Dashboard

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