A credit card has a monthly credit limit that the cardholder can use. However, if you need money right away, most banks will provide you with a loan against your credit card. You can take out a loan against the credit limit that has been assigned to you. The limit will be credited to your account once the bank authorizes your loan request.
For the repayment of the loan, the bank charges a set interest rate. This loan can be repaid in EMIs over a certain period of time.
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Features of Credit Card Loans
Most credit card loans are pre-approved, which means you won’t have to fill out any additional paperwork and your loan will be processed and disbursed quickly.
You will be able to break down your expensive purchases into easy, affordable installments due to EMI plans given by issuers.
Some bank also provides a loan against another bank’s credit card through a Balance Transfer on an EMI plan, which allows you to transfer the remaining balance on many credit cards to a single card and pay the EMI.
You can also take a loan within or above your credit limit, depending on the issuer.
IndusInd Bank also offers a loan against your credit card that requires no verification.
You will be issued a pre-qualified loan using your IndusInd credit card. Depending on your needs, you can acquire a loan against your credit limit or a loan above your credit limit.
The loan against credit cards has a flexible repayment period and low-interest rates.
5). Standard Chartered Bank
You can get a loan of up to Rs. 5 Lakhs
Tenure ranging from 12 to 60 months will be credited to your accounts within 2 days.
Interest rates start from Rs. 1.17% per month
Comparision
Bank name
Amount(in Rs.)
Tenure
Interest Rate
HDFC Bank
up to 5,00,000
48 months-4 years
1.25% per month
IDBI Bank
50,000-5,00,000
up to 5 years
calculated at the time of availing loan
Kotak Mahindra Bank
up to 5,00,000
6 months-4 years
calculated at the time of availing loan
Induslnd Bank
up to unutilized credit limit
flexible options
calculated at the time of availing loan
Standard Chartered Bank
up to 5,00,000
12-60 months
1.17% per month
Eligibility of Credit Card Loans
The majority of credit card loans are unsecured, meaning they don’t demand any type of security. As a result, the loan is only available to a small group of cardholders.
To be eligible for a credit card loan, the cardholder must have a strong credit history and a healthy purchase and payback record.
FAQs
1). What is the difference between a credit card loan and a credit card cash withdrawal?
The main distinction is that the cash withdrawal limit is smaller than the credit card loan limit. In addition, the interest rates for cash withdrawals are typically greater than those on a credit card loan.
2). To apply for a credit card loan what documents are required?
The majority of credit card loans are pre-approved and do not demand collateral. When applying for a credit card loan, you do not need to submit any documentation.
3). Is it possible for everyone with a credit card to acquire a credit card loan?
No. When it comes to credit card loans, each issuer has its own set of eligibility conditions. This service is only available to a limited number of cardholders based on their credit payback history and credit standing.
4). What are the additional fees for a credit card loan?
A processing fee will be charged to your transaction. If you decide to foreclose on the loan, you may be charged a pre-payment penalty.
5). What are the drawbacks of taking out a credit card loan?
The interest rate will be greater, and if you do not pay the bill on time, you may face severe penalties.
