A credit card whether it is Kotak credit card, Axis credit card, ICICI bank credit card, or HDFC credit card, is fundamentally a financial instrument that permits you to borrow funds from the financial institution in order to mitigate your required expenditures while providing you the luxury to repay the amount on a later date.
However, note that to make the most of the credit card and levy no additional charges or fees, you must repay all the outstanding balances in full by the due date incurred on the card. A credit card provides you with a credit line that you can use to make your required repayments. However, such proceeds must be repaid to the bank by the due date as agreed mutually by the financial institution and credit card holder.
Credit card loan or loan against credit card is fundamentally a kind of personal loan, which you can avail against the remaining credit card limit. Borrowing a loan against a card includes no documentation procedure, unlike a personal loan, gold loan, loan against securities, loan against property, etc.
What’s meant by a credit card loan or a loan against a credit card?
A credit card loan is fundamentally a financing option that is provided to you as a credit card user instantly. The loan is provided against the unused credit card limit of the instrument. Here is what you must know about credit card loans –
∙ You can get a loan against the unused limit of your card instantly.
∙ Loan against card holds an interest-free period of as high as 90 days, making such loans very affordable for all credit card users.
∙ You as a borrower can make simple repayment of loan against card in installments.
What are the important advantages of a loan against a credit card?
Using a credit card loan comes with numerous advantages. Most of the advantages are listed below. Read on to know –
∙ Such loans are quickly disbursed as they do not include any documentation procedure.
∙ The amount you would get as a credit card loan can simply be transferred directly to the bank account, making it simpler for you to use the same.
∙ Low rate of interest rate applied on the credit card loan, which makes such loan viably economical.
∙ You can avail of the loan proceeds instantly by placing an online request.
∙ Application process for credit card loans may be performed telephonically or online in just a few easy and simple steps.
∙ You can place an application for this kind of loan at anytime from anywhere.
∙ There are absolutely minimal processing charges for such kinds of loans.
∙ You as a borrower can repay loan proceeds in simple and easy installments every month, which are billed as per your billing cycle every month.
∙ Such loans are usually sanctioned for a period of at least 24 months or 2 years.
Who should borrow the loan against a credit card?
Firstly, if you are one of those who own a card and require money to mitigate any of your unforeseen or urgent expenditures, then you can go ahead and opt for a loan against the card option. There are specific eligibility parameters that you must mitigate before placing an application for a credit card loan. These include –
∙ You must be an existing credit card customer of the financial institution.
∙ You must mandatorily hold a credit card.
∙ It is crucial for you as a borrower to hold a strong credit score of at least 750 and above with an impressive record repayment record.
Before you place the application for a loan against a credit card, ensure to carefully evaluate your credit history by using mobile banking, net banking, or by approaching your nearest financial institution. Also, it is crucial to remember that once you borrow the credit for a higher amount than your card withdrawal limit, against the unused limit of your card, your financial institution may block your card for further usage till you repay the borrowed funds in installments by the set repayment tenure.
Also Check: Axis Credit Card
What are the important documents required for availing of a loan against a credit card?
In many of cases, there’s completely zero documentation procedure involved in the process of availing credit card loans. This is because to avail of a loan, you must hold a credit card, and to avail of a card, you would already have submitted the required KYC documents. And till the time you have been using your credit card, you would have already built your score well against which you can easily avail of a loan on credit card.
However, when you place the application for a credit card, ensure to provide the documents listed below.
∙ Address proof copy
∙ Identity proof copy
∙ Current passport-size photo
∙ Last three months’ salary slips (applicable only for the salaried individuals)
∙ Copy of office identity card (applicable only for salaried individuals)
∙ Attested copy of latest income tax return or ITR (applicable only for self-employed individuals)
∙ PAN card copy (applicable only for self-employed individuals)
How can you place the application for a credit card loan?
Ensure to follow the steps mentioned below to apply for the credit card loan –
∙ Approach the official site of the financial institution from where you want to borrow the credit card loan.
∙ Fill out the form and provide all the necessary documents.
∙ After document submission, the financial institution will take a look at your application form for credit card loan and verify all your provided documents.
∙ On successful authentication of the details mentioned on the application form and your submitted documents, the financial institution will easily disburse the loan proceeds to your account or even may issue a DD or demand draft for the required loan proceeds.
In case you are looking to apply for the credit card loan via the offline route, then you must ensure to approach the financial institution from where you want to borrow the credit option and place the application form along with the copy of the required documents to the concerned bank official.
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