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- What is a credit card loan?
If you have a credit card, you can get an unsecured personal loan called a loan against a credit card. This loan is based on your credit limit and your credit card usage history. In an emergency, this loan gets you access to cash right away with no paperwork required.
- How much loan can I get on my credit card?
The loan on your credit card will be based on the existing credit limit on the card. A few banks even offer more than your credit limit.
- What is a credit limit? How can I know the spending limit of my credit card?
Your credit card’s spending limit is determined by a number of factors, including your age, income, credit score, and a few more. The welcome letter that comes with your credit card will state this. When you log into your credit card online banking account, you can also see it.
- Is ‘Loan on Credit Card’ the same as credit card cash withdrawals at ATMs?
No, they are different. A loan on a credit card is similar to a personal loan where you get the loan amount credited to your bank account. Your credit card serves as collateral for this loan. In credit card cash withdrawal, you use your credit card to withdraw cash at an ATM, up to the cash withdrawal limit offered on your credit card.
- What is the average interest rate for a credit card loan?
The average interest rate for a credit card loan is around 12-29% per annum.
- What is the processing time for a credit card loan?
Since credit card loans are based on your existing credit card, the loans are processed within a few hours and the amount is credited to your bank account.
- Are credit card loans cheaper than personal loans?
Personal loans are definitely cheaper and more beneficial than credit card loans. Credit card loans offer loan amounts based on your credit card limit but personal loans give you higher loan amounts based on your credit score and income. Also, the interest rate on personal loans is much lesser compared to credit card loans.
- What is the difference between a credit card loan and a credit card cash withdrawal?
Cash withdrawals with a credit card provide immediate cash as well, but the loan amount is smaller and the rate of interest is higher than a credit card loan. It can reach 36% each year.
- Aside from the interest rates, are there any additional fees?
In addition to interest rates, banks levy a small processing fee. The processing cost varies depending on the bank and ranges between 1.5 – 5% of the loan amount.
- How can one apply for a loan against a credit card?
You can apply for a credit card loan simply on your credit card online banking account or by calling the customer care number of your credit card company.
- Do I need to submit any documents for a credit card loan?
Usually, no documentation is needed for a credit card loan as the loan is processed based on your existing credit card. However, if your KYC is not up to date, they may request you to submit your latest KYC documents.
- Will the bank check my credit score for a credit card loan?
Yes, there will be a credit check to find your latest credit score before processing a credit card loan.