Using your credit card to get a loan has now become a super convenient and easy way for people to get quick access to funds. Unlike traditional Personal Loans that involve a lot of paperwork, credit card loans make things simpler. You may use your existing credit card limit to borrow cash.
As the global economy keeps changing, the need for immediate financial help has become more urgent. Whether facing unexpected medical bills, planning home renovations, paying for education, or trying to consolidate debts, a loan on a credit card offers a flexible and speedy solution. With the rising cost of living and the uncertainties caused by economic fluctuations, having a reliable financial safety net has never been more necessary.
How to Get a Loan on a Credit Card
You must follow these steps to obtain a loan on credit cards:
l Check your Eligibility Criteria
Before applying for a loan on a credit card, borrowers must check whether they are eligible for this type of loan. Every bank has a different criteria. However, here is an overview of the eligibility criteria required by many reputed banks.
- A healthy credit score.
- A positive payment history.
- A good track record of the bank’s credit card spending.
Once you check all the points from the list, you can start with the next step – documentation.
l Documentation Proces
If you take out a loan from the same bank that issues your credit card, you are normally not needed to present any documentation. Most banks offer pre-qualified depending on your eligibility and relationship with the bank.
You will be asked to complete an online form. If you are applying with a different bank, you will need to submit documents, such as identity proof, residence proof, bank statements, etc.
l Check the Interest Rates
Another step while obtaining a loan on a credit card is to check the interest rates and other related fees. Leading institutions like ICICI Bank offer a competitive interest rate starting at just 13% with a flexible repayment tenure of up to 60 months. The processing is just 1% making them an ideal option for many potential borrowers.
l Application process
Unlike the traditional application process, borrowers can easily apply for a loan on a credit card through net or mobile banking. Here is an overview of both the process:
Internet Banking
- Log in to Internet banking.
- Click on ‘Cards & Loans’. If you have an offer for a Personal Loan on a credit card, it will appear below all your credit cards.
- Select ‘Instant Disbursal’ from the Personal Loan on Credit Card option.
- Enter the loan amount and tenure.
- Accept the terms and conditions, then click the ‘Generate OTP’ button.
- Enter the OTP obtained on your registered mobile phone and click ‘ submit’.
Mobile banking
- Connect to mobile banking.
- Click ‘Cards & forex. If you have an offer for a Personal Loan on a Credit Card, it will appear below all of your credit cards.
- Enter the loan amount and tenure.
- Accept the terms and conditions and click the ‘Generate OTP’ button.
- Enter the OTP sent to your registered cellphone number and click ‘ submit’.
Disbursal process
If the loan application is accepted and approved, the disbursal process varies on many factors.
- Instant offers: Customers having instant offers will get their loan amount within a few sec or minutes.
- Customers having instant offers but have savings accounts of different banks: The loan amount will be transferred within 3 working days.
- Customers who do not have an instant offer: The loan amount will be transferred within 3 working days.
How will the Funds Get Transferred?
The loan proceeds will be deposited in your bank savings account. Customers who do not have a Savings Account with the same bank will have the loan amount moved to their savings account with any other bank, the details of which will be provided to the customers.
You may apply for the personal loan from the comfort of your home or workplace by visiting the lender’s website.
Benefits of loan on a credit card
These are the benefits of a loan on a credit card:
l Quick Access
Credit card loans take very little time to get processed, and you also get the amount instantly. You will not have to undergo the long and tedious approval process associated with loans. So, if you are in an emergency and require instant cash, take a credit card loan and get funds without any delay. In emergencies where you need cash instantly, these loans become a perfect solution.
l Minimal Documentation
The lender has most of the financial information and credit history already, so there are no documents to prepare. Credit card loan applications are generally quick and easy to process. You will need to provide proof of income and employment if you do not have an account with the bank already.
l Unsecured Loans
Credit card loans are unsecured loans. Hence, there is no need to keep any collateral with the borrowers. It reduces the risk involved for the borrowers not having assets to keep as security for the loan. Secured loans are easier to qualify than unsecured loans, which are taken by keeping any asset as security for the loan.
l Improvement of Credit Score
Timely payment of credit card loans can help you improve your credit scores and thus, overall creditworthiness. It also manages and optimises credit utilisation ratio which is helpful for healthy credit scores.
Conclusion
When dealing with cash flow issues, credit card loans turn out to be really useful. Unlike traditional loans, they do not require you to wait for an extensive amount of time. These loans are easy to get and quickly accessible, making them an essential tool for managing your money. With an increasing number of people searching for solutions that match their hectic lifestyles, Personal Loans via credit cards have become a must-have for modern financial management.
Follow our WhatsApp channel
