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Home / Technology / Paytm to offer up to 5 lakh loan to merchants. Know how to apply
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Paytm has partnered with scheduled commercial banks and NBFCs to offer collateral-free instant loans of up to 500,000 at a low-interest rate and also offers a unique daily EMI product customized for small merchants. The loans can be availed from the 'Merchant Lending Program' in the Paytm for Business app. The algorithm determines the credit-worthiness of the merchant based on his daily transactions and arrives at a pre-qualified loan offering. 

With a completely digital loan application process, there are no additional documents required. Loan repayment is primarily collected from the merchant’s daily settlement with Paytm and there are no pre-payment charges on these loans.

Here is how to get the loan through Paytm in 5 simple steps:

1. Tap on the “Business Loan" icon on the Paytm for Business App home screen & check the offer available for you. You can also increase or decrease the loan amount as per your requirement.

2. Once you choose the amount, you will be able to see details like loan amount, amount to be disbursed, total payable, daily installment, tenure & more

3. Confirm your details, click on the check box & tap on “Get Started" to proceed. You can also give your consent to get your KYC details from the CKYC to complete your loan application quickly.

4. On the next screen, you can confirm or fill in details like your PAN card data, date of birth & E-mail address. Once done, you can proceed with offer confirmation. Once PAN details are verified, your credit score will be checked & KYC details will be verified.

5. After submitting your loan application, the loan amount will be disbursed in your Bank A/c. Please ensure that before the final submission all details are correct.

The company in its Q3 FY22 report had shared that the number of Merchant Loans disbursed on the platform grew 38% Y-o-Y, while the value of Merchant Loans grew 128% Y-o-Y. More than 25% of loans were disbursed to new to credit borrowers. 

Average ticket size continues to increase with scale, now at 120,000-140,000 with average tenure of 12-14 months. Repeat loans have seen a healthy take up, with 25% of merchants having taken a loan more than once.

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