A credit card is a thin plastic card, issued by a financial company that lets cardholders to borrow funds from a pre-approved limit based on the cardholder’s credit score, to pay for goods and services and cardholder should pay the money back to the finance company within the stipulated time without any interest. If a cardholder is unable to pay in the stipulated time, the cardholder is liable to pay borrowed money plus interest. Users can swipe the credit card to make a payment or use it for online transactions.
A loan against credit card is just like a personal loan. If you are using a credit card, you can easily apply for an instant loan against your card based on your limit. The only difference between a personal loan and a loan against credit card is that a Personal Loan takes a couple of days to get approved while a loan against credit card is pre-approved. Unlike a personal loan, a loan against a credit card does not require documentation. A personal loan normally needs a few documents in support of your eligibility. Since loan against credit card needs no documentation, it is another quickest and easy option to raise finance to cover your financial needs. A loan against credit card is an unsecured loan.
Loan against Credit Card Eligibility:
Customers who have had a good track record with a financial company with respect to their Credit Card spends, transaction pattern and Payment history become eligible for Loan against Credit Card. Since a Loan on Credit Card are pre-approved and extended without any documentation or collateral, a bank typically looks at your credit history and repayment record. Not everyone who has a Credit Card can get a loan.
Before applying for a loan against your credit card, you can also check your eligibility by using net banking, phone banking and visiting your nearest branch. The amount you receive as the loan is dependent on the credit limit on your card which is again dependent on your income, repayment history and documentation. Normally, the amount of loan against your credit card tends to be higher than the cash withdrawal limit on your credit card. Your bank may block the cash withdrawal limit on your credit card if the loan taken exceeds the cash withdrawal limit. You will not be able to use your card to withdraw any cash until the loan amount comes down and falls below the cash withdrawal limit.
How much Loan on Credit Card can you get?
You can get a cash loan within your Credit Card spending limit or even beyond it depending on your eligibility.
Documentation for Loans against Credit Card:
Although there is no documentation is required to apply for a loan against your credit card because all the documents are already with your bank. Based on those documents that you have already submitted and the relationship you build with your bank, the bank can sanction a loan against your credit card. Normally, a bank asks for the following documents when you apply for a credit card:
- A copy of your address proofs
- A proof of your identity
- A few recent passport sizes photographs
- Last 3 months’ salary slips for salaried employees
- A copy of office ID card – for salaried employees
- Self-employed individuals need to submit an attested copy of the latest ITR (income tax return)
- A copy of PAN card
How do you repay the loan?
Every financial company provides you easy monthly installments (EMI). You can repay the loan in easy monthly installments (EMI) over the tenure you have chosen. The tenure can vary from company to company. The EMIs will be added to your credit card statement and will have to be paid on the due date along with payment for any other purchases you may have made. Your credit limit will be reduced to the extent of your EMI amount.
Features and benefits of Loans against Credit Card:
- No documentation required
- Get instant cash whatever you need and whenever you need
- Attractive Interest Rates (less interest rate as compared with cash withdrawals on credit card)
- You can apply for it online or by simply making a telephone call
- Enjoy fast processing and quick disbursal upon approval
- You can apply for it from anywhere at any time
- Loan against credit card is a type of unsecured personal loan
- Low processing fee is charged