Do you need funds to meet an immediate financial requirement? Do you currently possess a credit card? If so, you can apply for a personal loan against your credit card to cater to your short-term financial requirements. Most banks and financial institutions offer credit card loans to help borrowers manage their finances during a cash crunch.
It is worth noting that the loan amount depends on your credit limit. For example, if you have ₹500,000/- as a credit limit, your lender may even offer up to 100% of your credit limit as a loan. Even store credit cards are now available and you can check out the easiest store credit card to get. However, before approving your loan application, your lender checks your credit score and repayment capacity.
What is a Credit Card Loan?
It is a personal loan that you can avail of against your credit limit without going through extensive documentation. The unsecured loan that serves multiple purposes. It means that you do not have to pledge your asset with considerable value as a security to the lender. Also, you can use the loan amount for whatever reason you wish. There is no restriction on the end-use of the loan amount from the lender.
Anyone with a credit card can apply for a personal loan. However, you must convince your lender that you have been using your credit card responsibly and can repay the loan amount without any defaults. The benefit of a personal loan on a credit card is that loan disbursement is quick. With affordable credit card EMI interest rates, you can easily make repayments without putting any burden on your pocket. You can repay the loan amount with interest within 6 to 60 months.
The Perks of Applying For a Personal Loan Against Your Credit Card
There are numerous benefits you can avail of while applying for a personal loan against your credit card.
- There is no documentation involved to apply for a pre-approved personal loan.
- It is a collateral-free loan. It means that you do not need to pledge anything as security.
- You can get the loan amount based on your needs. However, the principal loan amount cannot exceed the credit limit.
- With affordable credit card EMI interest rates, repayment is easy.
- You can avail of attractive interest rates based on your credit score and repayment capacity.
- It enables you to access funds almost instantly and cover the cost of emergencies.
- You have flexible repayment tenures to avail of. Depending on the loan amount and interest rate, you have the luxury to choose a tenure between 6 months to 60 months.
It is worth noting that you can only apply for a credit card loan if you have a credit card. If you do not have a credit card, apply for one online and then opt for a personal loan. Keep in mind that you will need to maintain an excellent credit score to acquire a personal loan against your credit card.
Eligibility Criteria
Before applying for a personal loan on your credit card, you must ensure to meet the requirement of your lender. Here are the eligibility criteria that are common across all platforms:
- It is mandatory to have a credit card with a considerable limit on it.
- You must have an excellent credit score to apply for a loan against your credit card.
- Should maintain a great record of repayment history.
- You must have a stable income and must be within the income-back.
Documentation
As mentioned earlier, there is no documentation involved to apply for a personal loan against your credit card. To get a personal loan, you must have a credit card. You submit all your documents at the time of applying for a credit card. Therefore, applying for a personal loan against your credit card does require any documents to submit.
Your lender will sanction the required loan amount based on the documents you had submitted while applying for a credit card and the current financial relationship you build with your lender. Here are the documents you will have to submit while applying for a credit card:
- Identification proof: Aadhaar Card, PAN Card, Voters ID Card, Driving License, or Passport
- Address proof: Passport, Aadhaar Card, Driving License, Electricity Bill, or Telephone Bill.
- Income proof: Last three months’ salary slips for salaried employees. For self-employed individuals, latest ITR – Income Tax Return, and a copy of PAN Card.
- A recent passport size photograph
Conclusion
A personal loan against your credit card is a pre-approved loan that you can avail of to meet your immediate financial requirements without putting any burden on your finances. Keep in mind that your loan amount and interest rate depend on factors, such as credit limit, credit score, and income.
