Funds Instructor already discussed types, benefits, and disadvantages of Credit cards. According to Funds Instructor, a Credit Card is a better way to buy anything that you want at the time and pay for it later that can be a month or days sometimes.
And a Credit cardholder can also avail the personal loan benefit with the Credit card, which can be repaid thereafter in easy monthly installments.
In also addition, loans against Credit cards are usually pre-approved and it can be availed easily by the Credit cardholder. Loan against credit card is an unsecured loan like same day cash loans.
The loan amount is dependent on the Individual’s Card Credit limit that is dependent on the individual’s income, documentation, and repayment history.
Normally, the limit of personal loans in Credit cards is higher than the cash limit on the Credit card. When an individual avail a personal loan on the credit card then bank block its cash withdrawal limit on the credit card.
You need to aware with some followings things if you want to take a loan against your Credit card
1. Late Payments: Mostly banks are offer top-up loans against credit cards. And late payments can affect your chances to get a top-up loan on the Credit card.
Thus, if you have a loan against your credit card, then know that making late payments can impact your chances of getting a top-up. Try to avoid late payments, to get loans easily in the future.
2. Loan Tenure: Most banks offer a flexible tenure option with loans on credit cards, wherein the customers can opt for a repayment period of their choice. With unsecured loans against credit cards.
Generally, banks offer a maximum tenure of 24 months.
3. Rate of Interest: Rate of interest on credit card transactions attract a normal credit card rate of interest.
For example, if a loan against card amounts to 75% of the credit limit, the remaining 25%, will attract prevalent credit card interest rates. Thus, if the usage of the Credit card to make a transaction and fail to repay it within the interest-free tenure, it will be charged an annual interest rate of about 25%.
4. Processing Fee: While taking a loan against a credit card, processing fees are charged on the loan, which depends on the banks. Normally, processing charges on personal loans by banks fall in the range of 1 to 5%.
Features of loan against Credit card
- Personal Loan amount up to ₹ 10 lakh.
- Apply through online mode anywhere.
- Fast and quick disbursal upon approval.
- Flexible tenure of up to 60 months.
- Attractive rate of interest.
- Minimum documentation.
- No guarantor or Post-Dated Cheques required.
- Flexibility in loan tenure.
- Low processing fee.
- Repayment of loans in easy installments every month.
Eligibility on loan against Credit card
Customers who have had a good track record with banks with respect to their Credit Card spend limits, transaction patterns, and payment history become eligible for Personal Loan on Credit Card from time to time, depending on the internal policies of the bank.