You can get a loan against a credit card to address any unforeseen or planned financial requirements. Accessing funds against your card is a quick, easy solution for paying medical bills, repair costs, and other urgent or unplanned expenses.
This can be of great value as it has competitive interest rates and requires less time than getting approval for a personal loan. These loans help you get immediate access to funds without needing to liquidate other assets.
If you’re considering applying for it, be informed and proceed carefully. Having all
the information ready helps you make the most of this option.
Perks of a Loan Against a Credit Card
Requiring almost no additional documents, this credit facility is easy to access. All you need to remember is that the amount is linked to your credit limit. However, some issuers may allow you to even borrow beyond your credit limit. Having a credit card that allows such a facility is the first requirement.
If you are not yet a customer, then understanding what a credit card is and how it works can help you navigate your requirements for funds more effectively. This way, you can get your hands on a card that matches your needs and then get a loan against it.
Such loans make handling emergencies easier. They result in significant cost savings over time. Other advantages of credit card loans are:
- Cheaper Interest Rates: Credit card loan interest rates are reasonable compared to cash advances, making them a better option.
- Flexible Repayment: These types of loans generally allow you to repay over a period of 24 to 36 months. Choose a term based on your income and expenses so that you can repay the amount comfortably.
- Stress-free Application: You don’t need to take additional steps to get personal loan approval to access funds; you only need a credit card. Also, you don’t need any collateral to apply for a loan against your credit card.
- Affordable Fees: Financial institutions charge a small fee for processing the loan. It could be either a percentage of the total amount or a flat fee.
- Calculate EMIs: You can use an EMI calculator to tweak the amount and tenure to ensure that the monthly instalments do not strain your budget.
Getting a Loan Against a Credit Card
Applying for a loan against your card is a straightforward process and involves the following:
- Check the eligibility requirements with your card provider, like stable income and credit score, to proceed with the application
- Contact your provider to gain information regarding the terms and conditions related to availing the loan
- Apply for the loan on the mobile app, by logging into your card account, or calling customer care
- Attach any additional documents needed, if any
- Get the amount in your linked bank account
Factors to Consider While Getting a Loan Against a Credit Card
There are important aspects to consider while applying for a loan using your credit card:
- Not all cardholders can get this loan as it is only offered to you if you are eligible
- Ensure you have a high credit score, as issuers may provide you with it only if you have a good credit and repayment history
- Check with your issuer on the loan tenure, as it depends on various factors like your credit limit, credit history, credit score, etc.
- Some credit issuers may charge pre-closure fees, which makes it essential to be aware of this feature if you plan to repay your loan early
- Review the payment plan to avoid penalties and debt accumulation by ensuring timely payments and preventing defaults
After evaluating all these factors, you can decide between a traditional loan and a loan against your credit card limit. By leveraging credit card loans wisely, you can navigate financial crises more effectively while keeping your long-term financial health in check.
If you are looking for an instant approval credit card, the One Credit Card can be a game changer. Not only does it have zero annual and joining fees, but it also gives you lucrative offers on electronics, grocery shopping, travel, food, and more. You can also get a loan right from the app via the OneCash facility to meet your urgent needs with ease.
What’s more, its full-stack mobile app helps you set spending limits and stick to your budget. Earn 5X reward points and enjoy a bevy of offers with this stylish metal card. To explore its many benefits, apply now!
