These days, most people pay with credit cards. You may use it for anything, including shopping for food, lifestyle items, and gadgets. On the other hand, you can ask for personal loans using your credit card if you urgently need money. Continue reading to learn more about credit card loans and how they operate.
These days, you may find yourself in a situation where you are unable to pay your debts. While applying for personal loans is simple, you will save time and effort if you go for personal loans secured by a credit card. Let’s learn more about credit card loans and how they operate.
What is a Credit Card Loan?
One kind of pre-approved personal loan is a credit card loan. The best part is that you don’t have to go through a lot of documents. Paperwork is enough to confirm your eligibility. As it comes under unsecured loans, you can get the money without any security or collateral.
After assessing your credit history, spending habits, and transaction patterns, some banks may offer this service through a Personal Loan on a Credit Card.
Note—For credit card loans, your loan application can be accepted by any financial institution at a competitive interest rate.
How does a credit card loan operate?
The most significant benefit of a credit card loan is that it gives you emergency cash that you may use for various expenses, such as vacations, EMIs, and school fees. The payment is made right away. If you already have a credit card with your chosen bank, you are eligible for an attractive interest-only personal loan of up to Rs 20 lakh. Additionally, you can repay the loan over 60 months with little to no documentation required. Many banks provide appealing and affordable interest rates for credit card loans.
Applying for a personal loan using a credit card is simple if you need money immediately for personal purposes, especially if you already have a bank credit card. Subject to the bank’s internal policies, customers with a strong track record of transaction patterns and payback history regarding credit card expenditures are qualified for a Personal Loan on a credit card.
The loan amount is credited to your savings account. If you are using a credit card from a chosen bank but do not have a savings account with the same institution, the loan money is transmitted via NEFT or demand draft.
Advantages of Credit Card Loans
Now that you know how to get a credit card loan, the following are some significant benefits that you can get by taking out a loan against a credit card:
Instant Access to Money: With instant access to money that a credit card loan offers, you can immediately take care of your financial obligations. As long as the loan purposes are put to good use, they can be used for anything. The loan amount is deposited to the bank account you registered.
Easy paperwork and security: Credit card loans simplify the application process and save time by not requiring complicated documentation or collateral.
Reduced Interest Rates: When opposed to the interest paid on credit card cash withdrawals, credit card loans sometimes have more advantageous interest rates. In the long run, this can save a lot of money. However, this interest rate is still higher than that of personal loans.
Handy App Accessible from Anywhere: You may apply for a credit card loan anytime and from any location, whether at home or on the road. This convenience makes the borrowing procedure more accessible and flexible.
Minimal Processing Charge: Credit card loans are an economical financing option since they often have a low processing charge, which lowers the overall cost of borrowing.
Payment in Installments Each Month: You know, monthly installments can make your loan repayment simple. Thus, the whole amount is charged to your credit card in monthly installments to make things run smoothly.
