Using a digital wallet has made it simple to transfer funds and make online payments to a majority of merchants. These wallets are simply an extension tool to store funds, so you can make payments without carrying your physical card everywhere.
This not only increases your security but also makes one-tap payment easy. Since everyone carries their phone with them at all times, it eliminates the need to carry your wallet. Therefore, knowing all the features and benefits of a digital e-wallet is important.
Read on to know what is an e-wallet, its types, benefits, limitations, and more.
Working of E-Wallets
Knowing its working process is one way to understand the meaning of an e-wallet. As per the definition, these are applications or software-based systems that facilitate payment, fund transfers, bill payments, online booking, etc.
To use these apps, you need to connect your debit card, bank account or credit card with the app. Mobile wallets replace physical wallets as you no longer need to carry your card to pay the bill, as you can make payments digitally. The funds get deducted from your card or bank account.
Not all mobile wallets give you free rein to make payments. If you don’t know how and where to use your mobile wallet, you may find it difficult to make payments on the app. Here are all the types of e-wallets that you need to be aware of.
Open Wallet
This type of wallet allows you to spend your money on in-app purchases and payments outside the app. Most mobile apps of banks are open wallets. You can also use this type of wallet to execute any type of transaction.
Closed Wallet
This type of digital wallet only allows you to make in-app purchases or online merchant payments. You cannot use it to send money from one account to another. One such app available in India is Amazon Pay.
Semi-Closed Wallet
This type of wallet has limited restrictions, as you can make payments at select merchants and locations. Paytm is an example of a semi-closed wallet.
Here are some factors to consider when choosing from the wide range of digital e-wallets.
Benefits
Lowers the risk of credit card and debit card information misuse
Helpful in emergencies or to make payments if you forgot your wallet at home
All payments are tokenised to improve tracking
These apps keep a record of your past payments, which can be useful in budget management
You can get exciting deals and offers on the app to save money on every payment
It is a great option to make last-minute bill payments quickly to avoid penalties
You don’t need to maintain a minimum balance or pay additional charges
Drawbacks
They may have limited access or acceptability at select merchant outlets
If your mobile gets stolen, then the miscreant can access your bank account and credit card unless you have password protection
You need a strong internet connection to access it, which is not ideal for emergencies
Choosing from any of the digital wallet options is not a very hard decision, as they all have the best security measures in place. While you can link most bank accounts with electronic wallets, your credit card must be UPI-compliant for linking.
One option you can choose is the Fibe Axis Bank Credit Card, India’s first UPI-enabled numberless metal credit card. When using a digital wallet for UPI payments, you can earn up to 3% cashback with every purchase. That’s not all. It comes with a plethora of other perks.
This includes complimentary airport lounge access at domestic airports and a 1% fuel surcharge waiver on transactions of up to ₹5,000. It is also a lifetime free credit card, so you can save more money without having to pay annual and joining fees. So, download the Fibe App to get this card right now!
FAQs on Digital Wallet
How do I open a digital wallet?
To open an e-wallet account, download your chosen app from the Google Play Store or App Store and register with your credentials. With OTP verification, your registration is complete. Then, the next step is to link it to your bank account, for which you will get the instructions on the app. Once done, you can load money into it and pay for any purchase.
Is Paytm a digital wallet?
Yes, it is a secure and reliable digital wallet with an easy-to-use interface.
Is PayPal a Digital Wallet?
Yes, PayPal is a digital e-wallet as you can use it to initiate online payments from your bank account or credit card.
Do I need a digital wallet?
Having a mobile wallet is not necessary if you don’t want to. However, you can opt for this tool for a better payment experience.
If you are planning to purchase a property or take a secured loan, understanding the difference between mortgage and collateral is important. Although these terms are often used together, they have different meanings and purposes.
Collateral is an asset offered as security against a loan. A mortgage, on the other hand, is a legal arrangement in which an interest in specific immovable property is created or transferred to secure repayment of a loan or other debt.
For example, when you take a home loan secured by the house you are purchasing, the property acts as the collateral and the mortgage creates the lender’s security interest over that property.
Understanding how mortgage and collateral work can help you make more informed borrowing decisions.
What Is a Mortgage?
A mortgage is a legal arrangement in which immovable property, such as a house, land, or commercial property, is used to secure repayment of a loan or debt.
In India, a mortgage involves the transfer of an interest in specific immovable property for the purpose of securing the repayment of money advanced by way of a loan or another financial obligation.
Here’s how it generally works:
A borrower uses an eligible property as security for a loan.
The loan is repaid according to an agreed repayment schedule along with applicable interest and charges.
Depending on the loan structure, repayments may be made through regular instalments over the agreed tenure.
The borrower generally continues to hold ownership of the property, while the lender has a security interest over it until the secured debt is repaid.
Once the mortgage obligations are fully discharged, the lender’s security interest can be released or redeemed according to the applicable process.
If the borrower defaults, the lender may have the right to enforce its security over the property, subject to the loan agreement and applicable laws.
A mortgage can therefore allow borrowers to access substantial financing while using immovable property as security.
Also Read: Complete Guide on Mortgage Loan
Types of Mortgages
Mortgage arrangements can differ depending on the loan structure, interest-rate mechanism, property type, and purpose of borrowing. Some common types you may come across include:
Type of Mortgage
Meaning
Common Use
Fixed-Rate Mortgage
The applicable interest rate remains fixed for the agreed period, subject to the lender’s terms
Borrowers who prefer predictable repayments
Floating or Adjustable-Rate Mortgage
The interest rate may change based on the applicable benchmark or lender’s rate structure
Borrowers comfortable with changes in repayment amounts or tenure
Reverse Mortgage
Eligible senior homeowners can use the value of their residential property to receive periodic or lump-sum funds, subject to applicable conditions
Retirement-related financial needs
Commercial Mortgage
Commercial property is used to secure financing
Purchase or financing of offices, shops, warehouses, and other business properties
Property-Backed Mortgage
Existing immovable property is mortgaged to secure borrowing for an eligible purpose
Personal or business financing against property
The exact product structure, interest rate, tenure, and eligibility requirements depend on the lender and applicable regulations.
What Is Collateral?
Collateral is an asset offered as security to a lender against a loan or other credit facility.
A loan backed by collateral is generally referred to as a secured loan.
Here’s how collateral works:
The borrower offers an eligible asset as security against the loan.
The lender assesses the value and acceptability of the asset before approving the facility.
The amount that can be borrowed may depend partly on the value of the collateral and the lender’s applicable loan-to-value criteria.
The borrower remains responsible for repaying the loan according to the agreed terms.
If the borrower defaults, the lender may enforce its rights over the collateral to recover outstanding dues, subject to applicable laws and contractual terms.
Collateral is not limited to property. Depending on the loan product and lender, different assets may be accepted as security.
Types of Collateral
Different types of assets can serve as collateral depending on the nature of the loan.
Type of Collateral
Examples
Common Use
Real Estate
Residential property, land, commercial property
Property-backed and business loans
Gold
Eligible gold jewellery and other permitted gold assets
Gold loans
Vehicles
Cars, commercial vehicles, and other eligible vehicles
Vehicle financing
Financial Assets
Fixed deposits, eligible shares, bonds, or other securities
Loans against securities or deposits
Business Assets
Machinery, equipment, or inventory
Business and working-capital financing
Receivables
Eligible unpaid invoices or receivables
Invoice or receivables-based financing
The type and value of collateral accepted depend on the lender’s policy and the loan product.
Difference Between Mortgage and Collateral
Mortgage and collateral are closely related, but they are not interchangeable terms.
A mortgage specifically relates to immovable property being used to secure a debt. Collateral is the broader term for any eligible asset offered as security against borrowing.
In other words, a property can be collateral, but collateral does not always have to be property.
For example, if you take financing secured by your house, the property is the collateral and the mortgage creates the lender’s security interest over that property.
If you pledge gold to secure a gold loan, the gold is collateral, but the arrangement is not a mortgage because the security is not immovable property.
Mortgage vs Collateral: Comparison
Basis
Mortgage
Collateral
Meaning
A legal arrangement involving an interest in immovable property to secure a debt
An asset offered as security against borrowing
Scope
Specifically relates to immovable property
Broader concept covering different eligible assets
Asset Type
Houses, land, commercial property, and other immovable property
Property, gold, vehicles, financial assets, machinery, and other eligible assets
Purpose
Used to secure loans or debts against immovable property
Can secure different types of loans and credit facilities
Ownership
The borrower may continue to own the property while the lender holds a security interest, depending on the mortgage structure
Ownership and possession arrangements depend on the asset and type of security
Loan Amount
Often linked to property value along with the borrower’s eligibility and lender criteria
May depend on the value and type of collateral along with other eligibility factors
Tenure
Property-backed borrowing can have relatively longer repayment tenures
Tenure varies significantly depending on the loan and collateral
If the Borrower Defaults
The lender may enforce its security over the mortgaged property according to applicable law and loan terms
The lender may enforce its rights over the pledged or secured asset according to applicable law and loan terms
Example
A residential property mortgaged to secure a home loan
Gold pledged for a gold loan
Also Read: Secured Loans Vs Unsecured Loans
What Happens If You Default?
Defaulting on a mortgage or another collateral-backed loan can have serious financial consequences.
The exact recovery process depends on the type of loan, security arrangement, lender, loan agreement, and applicable law.
If You Default on a Mortgage
If mortgage repayments remain unpaid, the lender may initiate recovery proceedings after following the applicable process.
Depending on the circumstances, this may involve:
Sending notices for the unpaid dues
Levying applicable charges according to the loan agreement
Reporting repayment delays to credit information companies, where applicable
Enforcing the security interest over the mortgaged property
Taking possession of or selling the property where legally permitted to recover outstanding dues
If the property is eventually sold as part of a lawful recovery process, the proceeds are applied towards the outstanding debt and applicable costs. Treatment of any remaining amount depends on the applicable process and legal requirements.
If You Default on Another Collateral-Backed Loan
For other secured loans, the lender may enforce its rights over the collateral according to the loan agreement and applicable laws.
For example, depending on the product and legal arrangement, gold, securities, vehicles, or other assets may be sold or otherwise realised to recover unpaid amounts.
Default can also affect your credit profile and future borrowing eligibility if the delayed or unpaid amounts are reported to credit information companies.
It is therefore advisable to contact your lender as early as possible if you anticipate difficulty making repayments.
How Do Mortgage and Collateral Work Together?
Mortgage and collateral work together because the mortgage creates the security arrangement, while the immovable property serves as the underlying security or collateral.
Here’s a simple example:
Suppose you purchase a property worth ₹50 lakh and borrow ₹35 lakh from a lender.
The property is used to secure the ₹35 lakh loan. A mortgage is created over the property in favour of the lender according to the applicable legal and contractual process.
You then repay the loan through the agreed instalments, which generally include principal and interest.
During the repayment period, you may continue to own and use the property, depending on the mortgage structure, but the lender retains its security interest.
Once the secured loan is fully repaid and the applicable closure formalities are completed, the mortgage can be released or redeemed.
If you fail to repay, the lender may enforce its security rights to recover the outstanding amount, subject to applicable laws and contractual terms.
The simplest way to remember the distinction is:
Mortgage = the security arrangement involving immovable property Collateral = the asset used as security
If you need funds for an eligible personal requirement without using property as security, you can also explore a Personal Loan from Fibe, subject to applicable eligibility criteria and lender terms. You can check your eligibility and apply through the Fibe App or website.
FAQs On the Difference Between Mortgage and Collateral
1.Are All Mortgages Collateral-Based?
Yes. A mortgage involves specific immovable property being used to secure a financial obligation.
The mortgaged property therefore serves as security for the underlying debt.
2.Does Collateral Act as Security for the Mortgage?
Yes. In a mortgage arrangement, the immovable property over which the mortgage is created serves as security for repayment of the debt.
If the borrower defaults, the lender may enforce its security rights according to the mortgage terms and applicable laws.
3.What Is the Difference Between a Pledge, Collateral, and a Mortgage?
These terms all relate to loan security but have different meanings.
Collateral is the broad term for an asset used to secure a loan.
A pledge generally involves eligible movable goods or assets being provided as security for a debt under the applicable legal arrangement.
A mortgage involves an interest in specific immovable property being used to secure repayment of a loan or other financial obligation.
For example, gold may be pledged as security for a gold loan, while a house may be mortgaged to secure property-related borrowing. Both assets serve as collateral, but the legal arrangements are different.
4.What Happens If I Default on a Mortgage or a Collateral-Backed Loan?
If you default, the lender may begin recovery proceedings and enforce its rights over the secured asset according to the loan agreement and applicable laws.
For a mortgage, this can involve enforcement against the mortgaged property. For other secured loans, the lender may enforce its rights over assets such as gold, vehicles, securities, or other collateral.
Default may also affect your credit profile if the repayment delay is reported to credit information companies.
5.Is a Mortgage Cheaper Than a Collateral-Backed Loan?
Not necessarily.
A mortgage is itself a form of collateral-backed borrowing, because immovable property secures the debt.
Interest rates and the overall cost of borrowing depend on factors such as:
Type and value of the security
Loan-to-value ratio
Loan purpose
Repayment tenure
Borrower’s credit profile
Income and repayment capacity
Lender’s pricing and eligibility criteria
Property-backed loans may sometimes carry lower interest rates than certain other loan products because the lender has valuable security. However, this is not guaranteed.
Always compare the interest rate, applicable fees and charges, repayment tenure, total repayment amount, and other loan terms before choosing a borrowing option.
This guide defines borrowing and lending, explains who borrows and lends in India, and breaks down the role interest plays for both sides of a transaction. You will also find a side-by-side comparison table and a real-life example to see how the difference between borrowing and lending plays out in practice. Read time: about 5 minutes
Borrowing means obtaining funds from another party with a promise to repay them, usually with interest. Lending, on the other hand, means providing funds to someone else with the expectation of getting them back, along with interest. Got questions about borrowing vs lending? It’s easy to mix them up, but understanding the difference is key to handling money wisely, whether it’s for personal finance or running a business.
Read on to know how each one works and why they’re so important in the financial world.
DID YOU KNOW?
Borrowing and lending are two sides of the same transaction: one party gets funds now, the other earns interest for providing them.
What is Borrowing?
It is a practice where you obtain funds for temporary use with the intent to repay it with interest. The meaning of borrowing money is receiving funds at a pre-defined interest rate.
Both individuals and businesses can borrow money, depending on their financial needs. Individuals typically borrow for reasons like education, medical emergencies, home purchases or day-to-day expenses, while businesses borrow to fund expansion, manage working capital or invest in equipment. Regardless of who borrows, the obligation remains the same: repay the principal along with interest within the agreed tenure, failing which the lender can take action as per the loan agreement.
What is Lending? (Lending Money Meaning)
It is the opposite of borrowing, where a financial institution provides you with funds in exchange for a guarantee provided for repayment. In other words, lending money means providing someone with funds in order to earn interest.
Lenders can be banks, NBFCs, or even individuals through peer-to-peer (P2P) platforms. Each of these entities lends money as a business or investment activity, aiming to earn a return through interest payments. Banks and NBFCs typically lend at scale using depositors’ or institutional funds, while individual lenders on P2P platforms lend smaller sums directly to borrowers, often for a higher rate of return than traditional savings instruments.
Types of Borrowing and Lending in India
India offers several forms of borrowing and lending, each suited to different needs:
Personal loans and business loans – unsecured borrowing from banks and NBFCs for individual or business needs
Interest is what connects every borrowing and lending transaction – it is the cost of using someone else’s money.
PRO TIP
Compare interest rates across a few lenders before borrowing – even a 1-2% difference adds up over a longer tenure.
From a borrower’s perspective, interest is the price paid for accessing funds today rather than waiting to save up. The rate depends on factors like credit score, income, loan tenure and whether the loan is secured or unsecured. A higher interest rate increases the total repayment amount, so borrowers often compare rates across lenders before choosing one.
From a lender’s perspective, interest is the return earned for taking on the risk of lending money. It compensates the lender for the possibility of default and the opportunity cost of not using those funds elsewhere. Lenders may offer fixed or floating interest rates, and factors like the RBI’s repo rate can influence how floating rates move over time.
To understand the difference between borrowing and lending, check out how these concepts work.
A borrower can request funds from an institutional lender, which can be a bank or a non-banking financial company (NBFC)
The lender will assess certain parameters like your creditworthiness, income, etc., to determine whether to approve your request
If they extend an approval, you will receive the loan amount in your bank account
The terms of the agreement of the loan will mention the tenure during which you will have to repay the loan
The repayment amount will constitute both the principal amount and interest charges
The repayment agreement will also contain a pre-defined rate at which the interest charges will be calculated
Apply for ₹5 Lakh Loan
Difference Between Borrowing and Lending
Basis
Borrowing
Lending
Meaning
It is when a deficit entity takes funds from a surplus entity on terms agreed upon mutually
It is the practice of providing money by a surplus entity to a deficit entity based on a mutual understanding
Purpose
The purpose of borrowing funds depends on the borrower’s financial requirements and objectives
Banks and other financial institutions lend money to earn interest
Flow of Capital
Capital flows from the money-deficit entity to the surplus entity
Money flows from the resource-surplus institution to the deficit entity
Parties Involved
Both borrowers and lenders are part of the transaction
Lenders and borrowers take part in the transaction
Terms of Transaction
In the case of borrowers with strong financials, the terms of loans are agreed upon by both parties mutually
While the terms are agreed upon mutually, the lending institutions generally dictate them
Interest Charges
The borrowers have to pay interest based on the rates pre-determined at the time of sanctioning the loan
The lenders receive interest payments along with the principal amount
Risk Exposure
Since they receive money, borrowing entities are typically at lower risk
Lenders are generally at higher risk, as borrowers can default on repaying the loan amount
Examples
A bank named XYZ provides ₹10 lakhs to an individual ABC, where the latter is a borrower
In the same example, the bank named XYZ is the lender
QUICK STAT
Borrowers generally carry lower risk since they hold the funds, while lenders carry higher risk since repayment depends on the borrower.
Now you may have understood the difference between lend and borrow on capital flow. This knowledge allows you to approach financial decisions with greater confidence. If you find yourself in need of surplus funds, explore Fibe’s Instant Personal Loan offered at competitive rates. Download the Fibe Personal Loan App or register on the application to get a loan with a flexible repayment option and minimal documentation.
FAQs on the Difference Between Borrowing and Lending
1. What is the difference between the lending rate and the borrowing rate?
The former is the rate at which banks and other financial institutions provide you with funds and charge interest. The borrowing rate determines the interest along with the principal amount you will have to pay as a borrower.
2. Is borrowing the opposite of lending?
Yes, both these terms are opposite of each other.
3. Do banks borrow or lend?
Financial institutions generally perform both functions. While banks lend money to retail borrowers, they also borrow money from the central bank as a macroeconomic measure to control inflation.
4. What is borrowing and lending in simple terms?
In simple terms, borrowing means taking money from someone with a promise to pay it back, usually with interest. Lending means giving money to someone with the expectation of getting it back, along with interest, within an agreed time frame.
5. What is the difference between lending money and borrowing money?
Lending money means providing funds to another party to earn interest, while borrowing money means receiving funds from another party and agreeing to repay them with interest. The two are opposite sides of the same financial transaction.
6. Can a person be both a borrower and a lender at the same time?
Yes. For example, someone could have an active personal loan (as a borrower) while also investing in bonds, fixed deposits or a P2P lending platform (as a lender). Banks operate similarly, borrowing from depositors and the central bank while lending to retail and business customers.
Looking for the best wallet app in India? The right choice depends on how you pay: PhonePe and Google Pay are strong for everyday UPI payments, Amazon Pay works well for shopping and bill payments, MobiKwik is useful for wallet-led payments and offers, while Apple Pay is relevant mainly for Apple ecosystem users where supported. For low-value daily payments, UPI Lite wallets are also becoming popular because they allow quick small-ticket transactions without entering a UPI PIN every time.
Digital wallets have become a practical alternative to carrying cash, debit cards, or credit cards everywhere. They let you store money, link bank accounts, pay merchants, recharge mobiles, clear utility bills, buy tickets and track spends from one app. With India’s digital payment ecosystem growing rapidly, UPI alone accounted for a dominant share of payment transaction volumes in the second half of 2025, showing how deeply mobile-first payments are now embedded in everyday life.
However, the best wallet app in India is not about which one has the most offers. A good wallet should be secure easy to use and accepted by merchants. It should also be clear about any charges. Follow the rules set by the RBI for prepaid payment instruments. The RBI made some rules in April 2026 to make prepaid payment instruments more secure and to help them grow in the long term.
What is a Digital Wallet / E-Wallet?
A digital wallet, also known as an e-wallet is a tool on your phone that lets you store money or link it to other payment sources like your bank account, debit card, credit card or UPI ID. You can then use it to make payments online or offline without using cash or cards.
For example when you pay for groceries by scanning a QR code recharge your FASTag pay your electricity bill buy a movie ticket or send money to a friend you are using a wallet or a UPI-enabled wallet or payment app. Digital wallets, like these make it easy to make payments. You can use a wallet to do all these things and it is very convenient.
In simple terms:
Feature
What it Means
Stores money digitally
You can load funds into a wallet balance
Supports quick payments
Pay merchants, bills and services in seconds
Links with bank accounts/cards
Many apps allow UPI, debit card or credit card linking
Keeps payment records
You can view transaction history anytime
Adds security layers
Apps may use PINs, biometrics, device binding and tokenisation
A wallet is different from direct UPI in one keyway: a wallet may store money in the app, while UPI usually moves money directly from one bank account to another.
Types of E-Wallets in India
E-wallets in India are generally classified based on where and how they can be used. Some can be used widely across merchants, while others work only within a specific platform or ecosystem.
Wallet Type
Examples
Key Feature
Open Wallet
ICICI Pockets, M-Pesa
Offers broader bank-like functionality, including cash withdrawal in permitted cases
Semi-Closed Wallet
Paytm, PhonePe, MobiKwik
Can be used at listed merchants; cash withdrawal is generally not allowed
Closed Wallet
Amazon Pay, MakeMyTrip Wallet
Usable only within the issuing platform or its partner ecosystem
UPI Lite Wallet
BHIM UPI Lite, Paytm UPI Lite
Designed for quick, low-value payments
In India, prepaid payment instruments are regulated by RBI. The regulator’s PPI framework covers wallets and similar prepaid instruments, and its 2026 draft directions aim to further strengthen transaction security and customer protection.
Top 7 Wallet Apps in India (2026)
Here are some of the most popular wallet and payment apps in India, along with their wallet type, key features and best use case.
1. Apple Pay
Type of wallet: Digital payment wallet / card-based payment service
Best for: iPhone, Apple Watch and Apple ecosystem users
Apple Pay allows eligible users to make payments using Apple devices by adding supported cards to the Apple Wallet. Its biggest strength is security. Instead of sharing actual card details with merchants, Apple Pay uses tokenisation and device-based authentication such as Face ID, Touch ID or passcode.
Key features:
Works across supported Apple devices
Uses biometric authentication for payments
Supports tokenised card payments
Useful for contactless payments where accepted
Can be used with Apple Watch for quick payments
Example:
If you regularly use an iPhone and Apple Watch, Apple Pay can make in-store payments faster by letting you pay without taking out your physical card.
Keep in mind:
Apple Pay’s availability and functionality in India may depend on bank, card network and merchant support. Users should check support within their Apple Wallet and issuing bank.
2. Amazon Pay
Type of wallet: Closed wallet / platform-linked wallet
Best for: Amazon shoppers, bill payments and gift card users
Amazon Pay is useful for users who frequently shop on Amazon or use Amazon for bill payments, recharges, subscriptions, travel bookings and gift cards. Since it is tightly connected to the Amazon ecosystem, it is especially convenient for users who already rely on Amazon for everyday purchases.
Key features:
Can be used for Amazon shopping
Supports bill payments and recharges
Offers cashback, rewards and promotional vouchers
Useful for gift cards and balance-based payments
Works with selected partner merchants
Example:
If you buy household items from Amazon every month, keeping an Amazon Pay balance or using Amazon Pay offers can help you pay faster and sometimes save through cashback or coupons.
Best for:
Online shoppers who want a wallet primarily for e-commerce, bill payments and rewards.
3. Google Pay
Type of wallet/payment app: UPI-led payment app with wallet-like digital payment features
Best for: UPI payments, bank transfers and everyday QR payments
Google Pay, popularly called GPay, is one of the most widely used payment apps in India for UPI transactions. It allows users to link bank accounts, send money, scan QR codes, pay bills and manage payment history.
Key features:
UPI-based bank-to-bank payments
QR code merchant payments
Mobile recharge and bill payments
Rewards and cashback offers
Strong Google ecosystem integration
Security features such as UPI PIN and device-level protection
Example:
If you need to split a restaurant bill with friends or pay a local store by scanning a QR code, Google Pay is a convenient option.
Best for:
Users who prefer direct bank payments through UPI instead of maintaining a separate wallet balance.
4. MobiKwik
Type of wallet: Semi-closed wallet
Best for: Wallet payments, bill payments, offers and users who want wallet-led transactions
MobiKwik is one of India’s older digital wallet brands and has been used for mobile recharges, bill payments, merchant payments and wallet-based transactions. It is useful for users who prefer keeping a dedicated wallet balance for frequent small payments.
Key features:
Wallet-based payments
UPI support
Bill payments and recharges
Cashback and discount offers
Merchant payments through QR
Pocket UPI-style wallet-led UPI payment options
Example:
If you want to separate your daily spending from your main bank account, you can load a fixed amount into a wallet and use it for food, travel and quick payments.
Best for:
Users who want a wallet balance for budgeting, offers and repeat transactions.
5. Paytm
Type of wallet: Semi-closed wallet / UPI payment app
Best for: Bill payments, merchant payments, recharges, transit payments and everyday digital payments
Paytm has been one of India’s most recognised digital payment brands. It supports UPI, wallet payments, merchant QR payments, recharges, utility bills, ticket bookings and other financial services.
That said, users should be aware of the regulatory developments around Paytm Payments Bank. RBI had earlier restricted Paytm Payments Bank operations, and in April 2026, RBI cancelled Paytm Payments Bank’s banking licence. This does not mean every Paytm app feature automatically stops, but users should check the latest in-app status, supported payment partners and wallet functionality before relying on it for critical payments.
Key features:
UPI payments
Wallet-based payments where available
QR merchant payments
Mobile recharge and utility bill payments
Ticketing and service payments
Cashback and rewards on selected transactions
Example:
If you use Paytm for FASTag recharge, mobile recharge, electricity bills and merchant QR payments, it can work as a single app for multiple payment needs.
Best for:
Users who want a multi-service payment app and are comfortable checking the latest supported wallet/banking features in the app.
6. PhonePe
Type of wallet/payment app: UPI-led app with wallet and financial service features
Best for: UPI payments, bill payments, recharges and merchant QR payments
PhonePe is widely used for UPI transactions, utility bills, mobile recharges, insurance payments, investments and merchant payments. It is easy to use and accepted across a large number of QR-based merchants.
Key features:
QR code payments
UPI bank transfers
Bill payments and recharges
Wallet and gift card options where applicable
Insurance, investment and financial service integrations
Transaction tracking
Example:
If you want one app for sending money, paying your broadband bill, recharging your mobile and paying at nearby shops, PhonePe is a strong option.
Best for: Users who want a broad UPI-first payment app for daily transactions.
7. WhatsApp Pay
Type of wallet/payment app: UPI-based payment feature inside WhatsApp
Best for: Sending money to friends and family within chats
WhatsApp Pay is built into WhatsApp and allows users to send and receive money using UPI. Its biggest advantage is convenience because payments can happen inside the same chat window where the conversation is happening.
Key features:
UPI payments inside WhatsApp chats
Simple money transfers to contacts
No need to switch apps for peer-to-peer payments
Uses UPI PIN for authentication
Useful for small transfers among known contacts
Example: If your friend paid for a cab or food order, you can send your share directly from the WhatsApp chat.
Best for: Peer-to-peer payments among friends, family and known contacts.
Quick Comparison: Top Wallet Apps in India
Wallet App
Wallet Type
Best For
Key Strength
Apple Pay
Card-based digital wallet
Apple users
Tokenised, device-based payments
Amazon Pay
Closed wallet
Amazon shopping and bills
E-commerce rewards
Google Pay
UPI-led payment app
Everyday UPI payments
Simple bank-to-bank transfers
MobiKwik
Semi-closed wallet
Wallet payments and offers
Wallet balance and cashback
Paytm
Semi-closed wallet / UPI app
Bills, recharges, QR payments
Multi-service payment ecosystem
PhonePe
UPI-led payment app
Daily payments and bills
Wide merchant acceptance
WhatsApp Pay
UPI payment feature
Chat-based transfers
Pay directly inside WhatsApp
Payment Wallets in India Issued by Banks
Some banks also offer their own payment apps or wallet-like digital payment solutions. These may be useful if you prefer using a bank-backed app.
Bank
Application Name
Axis Bank
BHIM Axis Pay
HDFC Bank
HDFC PayZapp
Punjab National Bank
PNB ONE
ICICI Bank
ICICI Pockets
IDBI Bank
Go Mobile+ App
State Bank of India
YONO SBI
Yes Bank
Yes Pay
Bank-issued wallets or payment apps can be useful for users who prefer managing payments within their existing banking ecosystem.
Linking Cards with a Mobile Wallet
The exact process may vary from app to app, but most payment wallets follow a similar flow.
Steps to Link a Bank Account or Card
Open the mobile wallet app
Launch the app and log in using your registered mobile number.
Go to profile or payments settings
Look for options such as “Payment Methods”, ‘Bank Account’, ‘Cards’ or ‘Linked Accounts’.
Select ‘Add Bank Account’ or ‘Add Card’
Choose whether you want to link a savings account, current account, debit card or credit card.
Choose your bank or card issuer
Select the bank from the list shown in the app.
Verify your details
Complete OTP, UPI PIN or card verification as required.
Start using the wallet or payment app
Once linked, you can pay merchants, transfer funds or load wallet balance depending on the app’s features.
Once you have linked your bank account or credit card with a wallet app, you may use it to load wallet balance or make payments directly. However, rules differ across wallets, banks, cards and UPI features.
If you want to make UPI-based payments using a credit card, check whether your card supports such transactions. For instance, the Fibe Axis Bank Credit Card allows UPI-based online payments without extra charges. As India’s first numberless metal credit card, it offers up to 3% cashback on online and offline payments, along with a 1% fuel surcharge waiver and partner offers. You can apply for the lifetime-free credit card through the Fibe App.
Advantages of E-Wallets in India
E-wallets are popular because they make payments faster, safer and easier to track. Here are the key advantages:
1. Convenience
E-wallets allow you to pay anytime and anywhere without carrying cash or cards. You can pay electricity bills, book tickets, recharge your phone, shop online or scan a QR code at a store with just a few taps.
2. Better Security
Digital wallets use safety layers such as OTP, UPI PIN, biometric login, device binding, encryption and tokenisation. Since you do not need to hand over your physical card for every transaction, the risk of card loss or theft is reduced.
3. Faster Transactions
Most wallet and UPI payments are completed within seconds. This is especially useful for daily payments such as groceries, cab rides, food orders, fuel, parking and small merchant payments.
4. Cashback and Rewards
Many wallet apps offer cashback, coupons, vouchers, reward points or merchant-specific discounts. While offers change frequently, they can help users save on recurring payments.
5. Easy Spend Tracking
Wallet apps maintain a transaction history, making it easier to track where your money is going. This can help you budget better, especially if you use a separate wallet balance for daily expenses.
6. Useful for Low-Value Payments
UPI Lite wallets are particularly useful for small payments. RBI increased the UPI Lite per-transaction limit to ₹1,000 and the total wallet limit to ₹5,000, making it more practical for everyday purchases.
How to Choose the Best Wallet App in India?
The best wallet app in India depends on your payment habits, not just app popularity. Before choosing one, check the following:
Security features: Prefer apps with UPI PIN, biometric login, device binding, encryption and fraud alerts.
RBI compliance: Use wallets and payment apps that follow RBI and NPCI guidelines.
Merchant acceptance: Choose an app that works across online stores, local shops, billers and service providers you regularly use.
UPI support: If you mostly pay directly from your bank account, pick a UPI-first app.
Wallet balance option: If you like budgeting with a fixed spend amount, choose an app with a wallet balance feature.
Rewards and cashback: Compare offers, but do not choose an app only because of short-term cashback.
Bill payment options: Check if the app supports electricity, gas, broadband, FASTag, DTH, credit card bills and insurance payments.
Customer support: A good wallet app should offer quick dispute resolution for failed or pending transactions.
Card compatibility: Check whether your debit card, credit card or RuPay credit card works with the app.
Ease of use: The app should be simple enough for daily payments without confusion.
Transaction limits: Check wallet, UPI and UPI Lite limits before making high-value payments.
A good rule of thumb: use one primary app for everyday UPI payments, one wallet for offers or budgeting, and your bank app for high-value or sensitive transactions.
E-Wallet Safety Tips in India
Digital wallets are safe when used carefully, but users should still follow basic precautions. Always download wallet apps from the official Google Play Store or Apple App Store. Do not share your OTP, UPI PIN, card PIN, CVV or screen-sharing access with anyone. Remember that receiving money through UPI does not require entering your UPI PIN; if someone asks you to enter a PIN to receive money, it is likely a fraud attempt.
You should also enable app lock or biometric login, keep your phone software updated and avoid using public Wi-Fi for payments. Check the receiver’s name before confirming a UPI transfer, especially when scanning QR codes. If your phone is lost, immediately block SIM access, log out of payment apps where possible and contact your bank or wallet provider. For better control, keep only a limited amount in wallet balance and review transaction history regularly.
FAQs on Wallet Apps in India
Is wallet better than UPI?
A wallet is better if you want to store a fixed amount for daily spending, use cashback offers or pay through wallet balance. UPI is better if you want direct bank-to-bank transfers without loading money separately. Many users use both: UPI for direct transfers and wallets for small payments, offers and budgeting.
Is GPay a mobile wallet?
Google Pay is primarily a UPI-based payment app in India. It works like a mobile payment app because it lets you link bank accounts, scan QR codes, send money, pay bills and manage transactions. However, unlike some semi-closed wallets, its core use case is direct UPI-based bank payments.
Is PhonePe wallet safe?
Yes, PhonePe is generally considered safe when used correctly. It uses UPI PIN-based authentication and app-level security features. However, user safety also depends on habits such as not sharing OTPs, verifying receiver names and avoiding suspicious payment links.
Which is the safest online wallet?
The safest online wallet is one that is regulated, widely trusted, regularly updated and equipped with strong security features such as PIN, biometric login, tokenisation, fraud monitoring and customer support. Apps like Google Pay, PhonePe, Amazon Pay, MobiKwik and bank-backed wallets are commonly used, but you should compare security features, reviews and grievance support before choosing.
What is the difference between an open wallet and a semi-closed wallet in India?
An open wallet can offer broader functionality such as purchases, transfers and cash withdrawal in permitted cases, usually when issued by banks or authorised entities. A semi-closed wallet can be used to pay listed merchants or service providers but generally does not allow cash withdrawal. Examples of semi-closed wallets include Paytm, PhonePe and MobiKwik-style wallet systems.
Which digital wallet is best for cashback and rewards in India?
The best wallet for cashback and rewards keeps changing because offers are campaign-based. Amazon Pay is useful for shopping-linked rewards, MobiKwik often runs wallet and bill payment offers, while Paytm, PhonePe and Google Pay may provide cashback, coupons or scratch cards on selected transactions. Always compare live offers inside the app before paying.
Can I use a digital wallet without a bank account in India?
Yes, in some cases you can use a digital wallet without linking a bank account by loading money through supported methods such as cards or permitted wallet top-ups. However, full access may require KYC, and many UPI features require a linked bank account. For direct UPI payments, a bank account is usually required.
Are digital wallets regulated by RBI in India?
Yes, digital wallets that qualify as prepaid payment instruments are regulated by the Reserve Bank of India. RBI’s PPI Master Directions set rules for wallet issuance, KYC, limits, interoperability, security, customer protection and grievance redressal. RBI also issued draft PPI directions in April 2026 to update the framework and strengthen digital payment security.
Ever paid for something with just a tap on your phone or by scanning a QR code? That’s digital payments (or electronic payments) in action. Digital payments are transactions made electronically using devices like smartphones, computers or cards instead of physical cash or cheques. The digital payment meaning is simple. It is the secure transfer of money from one account to another through online or electronic modes.
Instead of handing over cash, the money moves digitally between banks or payment systems. It is quick, convenient and easy for you to track. Today, common methods include UPI, mobile wallets, cards, bank transfers and QR codes.
Why Choose Digital Payments?
With digital payments, you do not have to worry about carrying notes or looking for change. Just your phone or card is enough to get things done in seconds.
They are secure and every payment leaves a clear record, so you always know where your money went. You can pay anytime, from almost anywhere. And in many cases, you also get rewards or cashback along the way.
How Does Digital Payment Work?
Here’s how digital payments work:
Step 1: You start the payment using your app, card or QR code.
Step 2: The request is sent securely to your bank to check if everything is in order.
Step 3: Your bank verifies the details and approves the transaction.
Step 4: The money is digitally transferred to the receiver’s bank.
Step 5: Both you and the receiver get a confirmation message.
All of this happens within seconds, which is why digital payments feel almost instant.
Types of Digital Payments
There’s not just one digital payment method. There are many. Here are the main types available in India and how they fit into your everyday life:
Unified Payments Interface (UPI)
If you have ever scanned a QR code at a store or sent money to a friend in seconds, you have used UPI. Introduced by the National Payments Corporation of India (NPCI) in 2016, UPI lets you transfer money directly from your bank account using a mobile app. You do not need to enter your bank details every time. A simple UPI ID or QR scan is enough and the payment is completed within seconds.
Credit, Debit and Prepaid Cards
Cards are one of the most familiar ways to pay digitally. When you use a debit card, the money is deducted directly from your bank account. A credit card allows you to spend within a set limit and repay later. Prepaid cards work slightly differently. You load money onto them first and then use them like regular cards. Whether you swipe, tap or pay online, you are making a digital payment.
Have you ever transferred rent through net banking or paid a bill through your bank’s app? That is mobile or internet banking. It allows you to move money using services like NEFT, RTGS or IMPS. You can also check your balance, download statements and manage your account without visiting a branch. Everything happens online, at your convenience.
Mobile wallets store money digitally on your phone. You can use them to pay for shopping, recharge your phone or send money to someone instantly. These wallets are usually linked to your bank account, debit card or credit card. It makes payments quick, especially for smaller daily transactions.
Point of Sale and E-commerce Payments
When you tap your card at a store counter, the payment is processed through a Point of Sale machine. When you shop online, a secure payment gateway handles your card or UPI payment. Both are digital systems working behind the scenes to make your transaction smooth and secure.
Bharat Bill Payment System (BBPS)
BBPS is a platform introduced by the RBI and managed by NPCI. It allows you to pay utility bills like electricity, gas, DTH and postpaid mobile from one place. Instead of visiting multiple websites, you can complete your payments through authorised channels in a simple and standardised way.
Aadhaar Enabled Payment System (AEPS)
AEPS allows you to perform certain banking transactions using your Aadhaar number. You can transfer funds or make payments at micro ATMs or PoS terminals using Aadhaar authentication. It is especially useful in areas where traditional banking access may be limited.
Unstructured Supplementary Service Data (USSD)
Do not have internet access? You can still carry out basic banking transactions. By dialling *99# on your mobile phone, you can check your balance, transfer funds or request a mini statement. It works even without data, making digital payments accessible to more people.
Digital Payment Examples
There are many ways people use digital payments in daily life. Some common examples include:
Digital cards such as credit, debit or prepaid cards can be stored in your mobile wallet and used for online or offline payments.
Mobile payment apps such as Google Pay, PhonePe and PayPal allow you to send or receive money instantly using your smartphone.
Bank transfers allow you to move money directly from one account to another through digital channels.
Contactless payments let you tap your card or phone on a machine to complete the transaction using secure technology.
Biometric payments use fingerprint or face recognition to approve transactions securely.
FASTag is another example where toll payments are made automatically using RFID technology while your vehicle is in motion.
What are the Fees Involved in Digital Payments?
Digital payments are usually affordable, but they are not always completely free. The actual cost depends on the payment method and who bears the charges.
Fee Type
What It Means
Platform or service fee
Payment providers may charge a fixed fee or a percentage per transaction for enabling digital payment services
Card processing fee (MDR)
For card payments, merchants may pay a percentage of the transaction value as a processing charge
GST on service fees
GST is typically applied only on the service or processing fee charged, not on the total payment amount
UPI and RuPay charges
Many UPI and RuPay debit card transactions currently do not attract MDR for merchants due to policy decisions
International transaction fee
Cross-border payments may involve currency conversion charges or additional processing costs
Chargeback or dispute fee
If a customer disputes a card payment, the merchant may incur an administrative or handling charge
Benefits of Digital Payments
Here are some of the pros of digital payments banking:
Enables you to make transactions within a few seconds from any device
Uses encryption and authentication to enhance security and prevent fraud
Provides records of transactions for better transparency and financial management
Minimises the risk of physical theft by handling transactions digitally
Provides discounts and cashback on transactions, which helps enhance savings
Typically involves lower transaction fees compared to traditional banking
If you prefer electronic payments, consider getting the Fibe Axis Bank Credit Card. With this card, you can make various payments or purchases with just a single tap. You can also link this card to all UPI platforms and apps for quick and easy payments.
In addition to a seamless payment experience, you enjoy a wide range of features and benefits. These include cashback on transactions, discounts on shopping, complimentary airport lounge access and more. Download the Fibe App or apply for the card through the website without any hassles.
FAQs on Digital Payments
How many digital payment methods are there?
There are various ways of digital payments banking, such as:
Unified Payments Interface (UPI)
Credit, Debit and Prepaid Cards
Mobile and Internet Banking
Mobile Wallets
Point of Sale (PoS) and E-Commerce
Bharat Bill Payment System (BBPS)
Aadhaar-enabled Payment System (AEPS)
Unstructured Supplementary Service Data (USSD)
What is payment type and payment method?
You can make payments in mainly 2 types:
Online
Offline
The payment mode or method can be the option you choose under each type, such as:
Unified Payments Interface (UPI)
Credit, Debit and Prepaid Cards
Mobile and Internet Banking
Mobile Wallets
Aadhaar-enabled Payment System (AEPS)
Unstructured Supplementary Service Data (USSD)
Which is the first digital payment app in India?
Launched in July 2004, Oxigen Wallet is the first electronic payment app or e-wallet in India.
The procedure of security lending and borrowing allows you to leverage your existing investment portfolio to unlock a wealth of new financial possibilities. Securities-based Lending (SBL) helps you amplify your returns and stay ahead of the curve in the stock market.
To know why it could be the missing piece in your investment strategy for unlocking the full potential of your portfolio and outpacing the market, read on.
What is Securities-Based Lending?
It is a practice by which you can access a loan by pledging your investment in stocks, mutual funds or Exchange-traded Funds (ETFs) as collateral. The following is a brief overview of lending on securities.
These loans generally do not come with any end-use restrictions, which means you can use the funds for multiple purposes
The only thing you cannot use the funds is for making further purchases of securities or using the same for deposit margin
How Does Securities-Based Lending Work?
SBL unlocks the hidden potential of your stocks, bonds, and other securities. Here is how security lending and borrowing works:
You will have to nominate the assets you want to pledge as collateral
The lender will then offer you a loan based on the value of these pledged assets
The loan amount against securities may range between 50% and 90% of the pledged asset’s value
In case you default on repayment, the lender can sell off the securities to recover the loans
This loan process offers access to additional capital without selling your valuable assets. The following are the advantages you get with lending of securities.
Lower Cost
The interest rates on securities-based loans are generally lower than the rates for personal loans or credit cards.
Flexibility
You can use the funds available under these loans for a variety of purposes. For instance, you can use them to consolidate debt with higher interest rates, real estate transactions, educational expenses, tax payments and more.
Tax Efficiency
Securities-based loans allow you to avoid potential capital gains taxes. It also enables you to continue reaping benefits such as dividends and appreciation.
Drawbacks of Securities-Based Lending
This credit facility offers the allure of accessing cash without selling off assets. But like any other investment strategy, the securities lending and borrowing option comes with certain drawbacks, including:
Volatility in the Market
The value of pledged assets is tied to market fluctuations, which can lead the lender to demand increased collateral if its value falls.
Risk of Default
If you fail to repay the loan, the lender will redeem your assets to recover the unpaid loan amount.
Can’t be Used to Buy Securities One of the biggest limitations of securities-based lending is that you cannot use the available funds to buy further securities.
If your current portfolio isn’t quite there yet, you can use the security lending and borrowing process to gather the required capital. Alternatively, you can also build your investment portfolio by accessing funds from Fibe. Don’t miss out on the potential to grow your wealth exponentially with an Instant Loan up to ₹5 lakhs. Download the Fibe Personal Loan App or register on the application to access capital at competitive rates and with minimal documentation.
FAQs on Securities-Based Lending
What are the basics of securities lending?
It is an act of taking out a loan against a financial security, stocks, bonds or derivatives. The following are some of the fundamentals of the security lending and borrowing:
It requires you to provide collateral for the security that you are borrowing
The collateral can be in the form of cash, bonds, stocks or letters of credit (LOC)
What is the difference between repo and SBL?
Here are a few factors that distinguish both these lending processes:
While the lending of securities involves equity, repo is against bonds
The former is securities-driven, and the latter is cash-driven
Initial margins or haircuts favour the securities lending, and the party providing cash is favoured by repo lending
What is the difference between margin and SBL?
The following are the distinguishing factors between these two lending processes:
You can use the margin loan amount to purchase securities
Securities-based lending does not allow you to use the proceeds to buy securities
Mutual fund loans allow you to leverage your assets to maximise returns and provide you with a strategic advantage. You can even unlock the potential of your mutual funds by taking a loan against them and then reinvesting those funds to compound your earnings.
Seasoned investors often use this strategy to access cash to keep riding the market wave while meeting their short-term needs. To know more about this strategy, benefits and risks, read on.
What is the Loan Against Mutual Fund Procedure?
This lending process can be a game-changer if you are struggling with a temporary financial need but are hesitant to disrupt your long-term investment. Here is the procedure to obtain a mutual fund loan:
Pledge your mutual fund units to the lender, which the lender will consider as collateral
The mutual fund units continue to earn returns while you repay the entire loan
You cannot sell your MF units until you repay the loan in its entirety
Once you repay the loan, the lender will release the pledge or lien marked over your MF units
If you default on loan repayment, the lender can sell off your mutual funds to recover the borrowed sum
Can I Invest the Loan Amount Received Against MF in Another MF Scheme?
This credit facility generally does not come with any restriction on the purposes of use. Hence, you can also utilise the loan amount to invest in mutual funds. However, there may still be certain restrictions on the type of investments allowed with the loan amount.
Things to Know When Availing Loan Against Mutual Funds
This innovative tool allows you to access quick cash without selling your valuable MF units. But before diving in, consider the following factors.
Access to Limited Funds
The amount you can get as a loan against mutual funds depends on the type of scheme and the financial institution from which you borrow. Banks generally provide you access to 50%-80% of the Net Asset Value (NAV) for equity mutual funds.
Not All Banks Provide MF Loans
Many banks and NBFCs lend money only if you have invested in certain mutual funds. Most of them only extend loans against those MFs registered under the Computer Age Management Solutions Private Limited (CAMS).
Lower Cost
Since these are secured loans, mutual fund loans offer funds at competitive interest rates than personal loans and credit cards. For instance, you will only have to pay an interest rate of 8%-10% p.a., which is considerably lower than unsecured credit.
Continued Returns on Pledged Funds
You remain invested in mutual funds even after you have pledged them. Also, you will continue to accrue returns as the NAV increases over time.
Convenient Online Facility
Due to technological advancements, most banks and NBFCs now allow you to access a loan against mutual funds from the comfort of your home. To apply for the same, all you need to do is visit the lender’s website or mobile application.
No Credit Check
When you avail of a loan against a mutual fund, which is a secured loan, the lenders don’t conduct an extensive credit check.
Risks Associated with Loan Against Mutual Funds
These offer a tempting solution for accessing quick cash without selling your investments. The following are some of the risks associated with them:
Market Volatility
As the loan amount depends on the loan-to-value (LTV) ratio, you may have to pledge more units if the NAV of your mutual fund falls.
Loss of Returns
If you do not repay the loan, you will lose the capital as well as the returns accrued over time.
Risk of Default
If you fail to repay the loan, the lender will redeem the MF units to recover the unpaid amount.
Several Charges
Loans against mutual funds come with processing fees, valuation charges and other charges, which can increase your cost of borrowing.
Now, you may have understood the potential of using mutual fund loans to stay invested if you believe in the bullish nature of the stock market. Fibe can help make it a reality by allowing you to get quick access to funds to invest in mutual funds. With Fibe, you can get hassle-free Instant Loans of up to ₹5 lakhs. Download the Fibe Personal Loan App or register on the application for funds at competitive rates and with easy documentation.
FAQs on Can I Take MF Loan to Reinvest in Mutual Funds
Can I take a loan and put it in a mutual fund?
Yes, you can pledge your investment in an MF to get access to quick funds. You can reinvest this amount in another mutual fund to earn potentially high returns.
Is a loan against mutual funds good?
A mutual fund loan allows you to get quick access to funds while letting you earn returns on your existing investment. These loans also come with attractive interest rates, flexible repayments and quick approvals. If you reinvest the loan amount in another MF scheme, you can earn potentially high returns.
Credit card and loan inquiries happen when a bank, NBFC or any lender checks your credit report with TransUnion CIBIL before offering you credit. These checks help lenders understand your repayment behaviour, past loans and overall credit history. You can even check your own score from time to time. But many people worry about does checking CIBIL score affect it. The answer depends on the type of inquiry. Some checks affect your score, while others don’t. Knowing the difference makes it easier to apply for credit with confidence.
Many people worry about whether their CIBIL score drops every time they or a lender checks it. This is a common doubt, especially when you track your score often to understand your credit health. Lenders like banks and NBFCs also run checks when you apply for a loan or credit card.
The impact depends on the type of inquiry. Some checks don’t affect your score at all, while others can cause a slight drop. If you’ve wondered how much CIBIL score will decrease for each inquiry, read on to know the different types of inquiries, their effects and more.
Understanding CIBIL Enquiries
Every time your credit report is checked, it is recorded as a CIBIL enquiry. These enquiries show lenders how often you apply for credit and how you handle it. But not all enquiries affect your score in the same way. Some are harmless and don’t change your score at all, while others can reduce it by a few points. The impact depends on why the check is happening and who is initiating it. Here’s how:
Type of Inquiry
Who Initiates It
Impact on CIBIL
Visible To
Examples
Soft Inquiry
You or institutions are checking basic eligibility
No negative impact on your score
Only visible to you on your CIBIL report
Checking your own score, pre-approved loan or card offers and background checks
Hard Inquiry
Lenders, when you submit a credit application
Can reduce your score by 0-5 points, depending on your credit history
Visible to lenders and financial institutions
Personal loans, car loans, home loans, new credit cards and limit increase requests
Soft inquiries are completely safe and do not harm your credit profile. Hard inquiries, on the other hand, can affect your score if they occur too often within a short time.
Impact of Credit Card Inquiries on Your CIBIL Score
Every hard inquiry leaves a mark on your credit profile. Understanding how it affects your score can help you apply for credit more carefully. Here’s what really happens when lenders check your report:
Small drop per inquiry: A hard inquiry can reduce your score by 0-5 points. The impact varies based on your credit history length. If you’re new to credit, each inquiry can impact your score a little more.
Multiple applications signal credit stress: When you apply for many loans or cards within a short time, it signals credit stress. It tells lenders you may be relying too much on credit, which becomes a red flag for approvals.
Hard inquiries stay for 24 months: Once recorded, these enquiries remain on your TransUnion CIBIL report for 2 years. Even if the loan gets rejected, the inquiry stays.
Affects loan approvals: Too many inquiries can reduce your chances of getting approved for future loans or credit cards. Lenders prefer borrowers with fewer and spaced-out applications.
Can influence interest rates: When lenders notice repeated inquiries, they may still approve your application, but at a higher interest rate to cover the perceived risk.
Managing CIBIL Enquiries Effectively
Managing your credit inquiries well helps you keep your score steady. Here are a few easy habits to follow:
Apply only for credit you truly need: Every loan or credit card application triggers a hard inquiry, so limit requests to situations where you genuinely require funds.
Compare offers before applying: Check interest rates, eligibility and benefits in advance. This prevents multiple rejections and reduces the number of inquiries on your report.
Use pre-qualification tools: Many lenders offer soft inquiry checks to tell you if you’re likely to be approved. These checks do not affect your score.
Space out your credit applications: Avoid applying for several loans or credit cards at the same time. Spacing them out shows lenders that you are not credit-hungry.
Review your CIBIL report regularly: Monitoring your report helps you spot errors or unauthorised inquiries early so they can be corrected quickly.
Dispute unexpected inquiries: If you see an inquiry you don’t recognise, raise a dispute with TransUnion CIBIL and inform the lender. Acting early helps protect your credit profile.
And if you ever want instant funds but have a lower score, Fibe offers a quick and easy solution to get funds. You can apply for an Instant Personal Loan and manage all your planned or unforeseen financial needs without any hassle.
We use an alternate scoring mechanism to check your creditworthiness, allowing you to get funds affordably even with a lower CIBIL score. Download the Fibe App or apply on the website today.
FAQs on Whether Your CIBIL Score Reduces Every Time You Check It
How much does the CIBIL score decrease with each inquiry?
A hard inquiry can lead to a drop of 0 to 5 points in your CIBIL score. But there’s no need to stress by thinking whether or not your CIBIL score reduces every time you check it. It won’t impact much, as this check is considered a soft inquiry.
Does enquiry reduce CIBIL score?
Only hard inquiries can reduce your score. They happen when you apply for a loan or credit card. Soft inquiries, like checking your own score, do not harm your CIBIL score.
Can I remove a hard inquiry if I didn’t authorise it?
Yes. If you find an inquiry you did not approve, just raise a dispute with TransUnion CIBIL and inform the lender. Unauthorised inquiries will then be removed after verification.
How can I monitor and manage the number of credit inquiries reflected in my CIBIL report?
You can manage your inquiries by checking your CIBIL report every few months. Look for the ‘Enquiry’ section to see recent hard checks. If something looks wrong, you can raise a dispute right away.
When presented with a multitude of investment options, return on investment is a metric that can help you separate good bets from money pits. It allows you to evaluate potential ventures, predict profitability and mitigate risks.
Knowing the formulas to calculate it helps you make informed decisions and ensure that you never miss out on an opportunity to earn maximised returns. To know the ROI – return on investment – formula and how it helps you evaluate investments, read on.
What is Return on Investment?
This metric is a financial ratio that you can use to understand the potential benefits you can receive compared to the cost of investment.
Here is a brief overview of the return on investment:
It is expressed as a percentage and is closely related to concepts of Return on Assets (ROA) and Return on Equity (ROE)
Knowing what is an ROI allows you to compare different investment instruments based on their effectiveness and profitability
The higher the ratio, the higher will be the potential to earn
How to Calculate ROI?
This metric is instrumental in allowing you to assess your investments and make smarter financial decisions. The following is the ROI – return on investment – formula you can use:
ROI= Net Return on Investment/Cost of Investment × 100
Here is how to calculate the return on investment using an alternate method:
ROI= Final Value of Investment – Initial Value of Investment/Cost of Investment X 100
Why is ROI a Useful Metric?
Making smart investment decisions is crucial to get the most from your money. Here’s how the calculation of return on investment can help:
It helps you evaluate the historical success of an investment instrument and the returns produced
For business ventures, it allows you to decide whether to infuse capital for the expansion of a firm or allocate resources based on their viability
Knowing what is a return on investment allows you to compare options and assess whether investment risk outweighs the prospective profits
Understanding Good Return on Investment
As there’s no one-size-fits-all, figuring out what constitutes a good ROI can be tricky. Here are the factors to consider:
Risk Tolerance
Risk-averse investors can opt for investment instruments with lower ROIs for greater stability and predictability, and vice versa.
Investment Period
Determining the right ROI depends on the investment horizon, as a shorter duration generally offers lower ROIs.
Financial Goals
Whether your financial objective iswealth accumulation, income generation or capital preservation determines good ROI for you.
Industry Standards The right ratio of return also depends on market conditions, competitive landscape and regulatory environment.
Whether you’re eyeing stocks, real estate or entrepreneurial ventures, the calculation of return on investment allows you to earn higher returns. If you need funds for unexpected expenses and don’t want to liquidate your assets, get hassle-free Instant Personal Loans of up to ₹5 lakhs from Fibe.
Along with affordable rates, you get a flexible tenure and zero foreclosure charges, giving you flexibility and freedom to address your needs. Download the Fibe Personal Loan App to get quick access to funds with minimal paperwork.
FAQs on Return on Investment
What is ROI and its formula?
The following is a brief overview of return on investment-
It is a ratio that measures the profitability of an investment instrument
It compares the gains or losses against the cost of a stock, real estate, or other instrument to determine ROI
You can use the following two formulas to calculate ROI-
ROI= Net Return on Investment/Cost of Investment × 100
Or
ROI= Final Value of Investment – Initial Value of Investment/Cost of Investment X 100
How to calculate ROI in Excel?
Follow these simple steps for calculation of return on investment on MS Excel.
Open MS Excel on your device and create a new spreadsheet
Label the cells as A1 for ‘amount invested,’ B1 for ‘amount gained from investment’ and C1 for ‘ROI’
Enter data in A1 and B1 cells and input this formula- ‘A1/B1’ in a new cell C2
You will get a return on investment in the C2 cell
How to get a 25% return on investment?
An ROI of 25% is an ambitious target and will require you to take higher risk. It is crucial to note that there is no guarantee that an investment instrument can provide this much return year after year.
Is ROI calculated annually?
You can compute this metric for any period. Most commonly, it is calculated on an annual basis.
How to get a 10% return on investment?
You can invest in the following instruments to earn this much return:
Growth stocks
Real Estate
Corporate Bonds
Index Funds
Exchange-traded funds (ETFs)
However, note that the returns can fluctuate depending on the market conditions. Diversifying your portfolio can help you better manage this risk and get the best returns.
Is 30% ROI possible?
It is possible to earn this much return in the stock market. However, earning sustained returns of 30% year after year may not be possible.
Is a 7% return realistic?
Since it has been the historical return of many investment instruments, earning an investment return ratio of 7% is considered feasible.
India’s monsoon season is a magical time when the hills come alive, rivers swell, and the air is thick with the scent of wet earth. But planning a perfect rainy-season getaway means picking the right destination, knowing how to reach and what to explore.
Here’s a list for top 10 monsoon destinations in India, complete with airport distances and travel tips to make your trip easy-peasy and super fun.
Kodaikanal, Tamil Nadu
Nicknamed the ‘Princess of Hills’, Kodaikanal’s misty forests and serene lakes make it a monsoon wonderland.
Check road conditions: Landslides can affect hilly areas.
Book stays wisely: Choose hotels with good drainage and easy road access.
Plan buffer days: Unexpected rain can cause delays.
Stay connected: Mobile networks can be patchy; keep offline maps handy.
If your wallet is feeling the monsoon blues, consider getting a Fibe Instant Personal Loan. Get up to ₹5 lakhs with minimal documentation, zero end-use restrictions and flexible tenures. Perfect for flight or travel tickets, hotels or even adventure sports!
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FAQs on Monsoon Travel in India
Which is the best place to visit in monsoon in India?
Choosing a perfect monsoon destination depends completely on your mood. Darjeeling, Coorg, Munnar, Spiti Valley and Valley of Flowers are some great options.
How to reach these destinations?
All destinations are well-connected by air; check each place’s nearest airport and local taxi/bus options.
Which place is best to visit in July?
July is perfect for most monsoon destinations. At that time, Coorg, Munnar, Darjeeling and Kodaikanal are excellent picks.
How is Kerala in monsoon?
Kerala experiences refreshing rain with sunny spells. It is ideal for waterfall treks and some breathtaking views.
How is Goa in monsoon?
Expect greenery, fewer crowds, and affordable stays — perfect for romantic getaways!
