Loan Against Credit Card

1. Interest-free Period: Loans against credit cards often come with an interest-free period of up to 90 days, enhancing affordability for credit cardholders.
2. Convenient Repayment: Borrowers can easily repay the loan against their credit card through manageable instalments.

Features of a Loan on Credit Card

Different banks offer comprehensive loan scheme when it comes to loan on credit cards. Listed below are some of the features of loan on credit card.

1. Since most of the loans on credit cards are pre-approved, you need not submit any extra documentation, and the loan will be processed and disbursed quickly. 
2. With EMI schemes offered by the issuers, you will be able to break your expensive purchases into easy, affordable instalments. 
3. Some banks also offer loans against other bank's credit cards through Balance Transfer on EMI, where you can transfer the outstanding balance on other credit cards to one credit card and pay the EMI. 
4. Issuers also offer you the option of taking a loan within or over your credit limit.

Benefits of Taking a Loan Against Credit Card

Opting for a loan against your credit card provides several advantages, including the following: 

1. Swift Disbursement: These loans are swiftly approved and disbursed, eliminating the need for extensive documentation. 

1. Direct Transfer: The loan amount can be directly transferred to your bank account, offering convenience in utilising the borrowed funds. 
2. Favourable Interest Rates: Loans against credit cards typically come with low interest rates, making them a cost-effective financing option. 
3. Instant Access: You can access the loan amount instantly upon request, ensuring quick financial support. 
4. Hassle-free Application: The application process for these loans can be finished over the phone or online through a few simple steps. 
5. Convenience: You have the flexibility to apply for this type of loan from any location and at any time. 

1. Minimal Processing Fees: These loans involve minimal processing fees, reducing the overall cost. 
2. Monthly Instalment Repayment: Borrowers can repay the loan amount through easy monthly instalments, conveniently billed to their credit card each month. 
3. Extended Loan Duration: Loans against credit cards are typically sanctioned for a duration of 24 months (2 years), providing a reasonable repayment period.

Who Should Consider Taking a Loan Against a Credit Card?

If you are a credit card holder in need of funds to address sudden or unexpected expenses, you can consider applying for a loan against your credit card. However, there are specific eligibility requirements to meet before applying for this type of loan: 

1. You should already be a customer of the bank that issued your credit card (as only a few banks offer credit card loans to new customers). 
2. You must possess a valid credit card. 
3. A good credit score and a history of timely credit repayments are essential for loan approval. 
4. Before applying for a credit card loan, review your credit history through internet banking, mobile banking, or by visiting a nearby bank branch. 

It's also important to note that if you request a loan amount exceeding your credit card's withdrawal limit against the unused portion of your credit limit, your bank may temporarily suspend your credit card until your loan balance decreases and becomes lower than your credit card's withdrawal limit. 

Documents Required for Obtaining a Loan Against a Credit Card

When seeking a loan against a credit card, there is typically no documentation process involved. This is because, to be eligible for such a loan, you are required to have a credit card, and when you applied for the card, you would have already submitted the necessary documents. By this time, you would have established a good relationship with your bank, making it easier to secure a credit card loan. 

However, when applying for a credit card, you will generally be asked to provide the following documents: 

1. Proof of address 
2. Identity proof 
3. Recent passport-size photographs 
4. Last three months' salary slips (for salaried employees) 
5. Copy of office ID card (for salaried employees) 

1. Attested copy of the latest Income Tax Return (ITR) (for self-employed applicants) 
2. Copy of PAN card (for self-employed applicants)

Eligibility for Loan on Credit Card

Most credit card loans are unsecured and do not require any collateral for the loan. Hence, the loan is offered to select cardholders only. Issuers have a strict eligibility criteria when it comes to granting a loan on credit card. The cardholder should have a commendable credit history and a good purchase and repayment pattern to be able to apply for a loan on credit card.

Quantum of Loan

  The quantum of a loan on a credit card usually depends on the credit limit. Some issuers also offer loans over and above the credit limit where the availed loan amount will not be blocked against the credit limit. Also, starting from a minimum purchase amount of Rs. 2000, you will be able to convert your purchases to loans and pay them as EMIs.

How to Request a Loan Against Your Credit Card?

To apply for a loan against your credit card, follow these steps: 

1. Visit the official website of your credit card provider or select the bank from which you want to obtain a credit card loan. 
2. Complete the application form and attach the necessary documents. 
3. Once you've submitted your documents, the bank will review your application form and verify your documents. 
4. After successful verification, the bank will disburse the loan amount to your bank account or provide a demand draft for the loan amount. 

If you prefer an offline application process, visit the bank branch where you intend to secure the loan against your credit card. Submit your application form to the relevant bank representative along with the required documents.

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