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.
Top Banks offering Credit Card loans
1). HDFC Bank
- HDFC Bank also has a credit card loan option that is pre-approved and will be barred against your credit limit.
- HDFC Bank would provide a maximum loan of Rs.5,00,000 that can be repaid at a 1.25 percent interest rate.
- The bank offers a variety of tenure options, ranging from 48 months to four years. Because the loan has been pre-approved,
- No additional documentation is required, and the funds are deposited into your savings account practically instantly.
2). IDBI Bank
- IDBI Bank also offers a General Credit Card Loan, which is a loan secured by your credit card.
- The smallest loan amount available is Rs.50,000, with a maximum loan value of Rs.5 lakh.
- The maximum tenure is 5 years, and the interest rate is linked to the bank’s base rate.
- This loan is available to anyone who is involved in non-farm entrepreneurial activity.
3). Kotak Mahindra Bank
- You can get a loan of up to Rs.5 lakh on a Kotak Mahindra Bank credit card with low-interest rates.
- The repayment period varies from 6 months to 4 years.
- When you apply for a loan and it is granted, the money is immediately credited to your Kotak Mahindra Bank or other bank savings account.
- Customers with a solid credit score, transaction history, and payback history will be eligible for a credit card loan.
4). Induslnd Bank
- 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
|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.
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.