A credit card holder can avail a pre-approved personal loan on their credit card within or over the card limit if found eligible by the lender. Being pre-approved loans, credit card loans do not need any collateral or extra documentation and are disbursed quite quickly.
There is also an EMI option in most of the credit card loan schemes which allows you to pay off your heavy expensive purchases over a span of time in the shape of instalments.
You have to pay a certain rate of interest which may vary between 13% to 32% per annum depending upon the lender. The eligibility criteria for this type of loan is a bit strict as lenders offers this option only to the peoples having sound financials and a good repayment history.
Advantages of Credit Card Loans
Pre-approved and Non-Collateral
The credit card loan are of pre-approved nature so they do not require any further documentation and even collateral to avail the loan.
The credit card loan provides the EMI option for purchases over a certain amount so you can divide the expense on your heavy purchases over a span of time in the shape of EMI.
Transfer of Balance Outstanding
Most of the Banks/FI also provide the option to transfer the balance outstanding from other cards to one single card and pay in EMIs.
Being pre-approved most of the credit card loans are disbursed quiet quickly.
Reasons to Avail Credit Card Loans
The credit card loan comes with an option of EMI for purchases over a certain amount. So it provides you the option to buy the desired product and then pay later over a period of time.
The credit card loan is an option to get instant cash because you don’t have to wait for the documentation and approval unlike personal loan. It is more suitable from cash withdrawal on credit card as the charges are higher for that. I.e. HDFC bank charges 2.5% for the cash withdrawal on credit card while the rate of interest on credit card loan is 1.25%.
The amount allowed as credit card loan varies from bank to bank; the bank can allow upto your credit limit or even beyond that. Generally it is between Rs. 20,000 to Rs. 5 Lacs.
Strict Eligibility Criteria
Being an unsecured loan the credit card loan issuers are quite strict regarding their offering. The cardholder should have a commendable credit history and a good purchase and repayment pattern to be able to apply for a loan on credit card.
The credit card loan do not require any further documentation if you have a pre-approved limit.
Credit Card Loan Offers
|Bank/FI||Maximum Amount||Interest Rate||Tenure||Processing Charges|
|HDFC Bank||Upto Rs. 5 Lacs||1.25% per month||Upto 48 months||Rs. 500 – Rs. 750|
|ICICI Bank||Upto Rs. 10 Lacs||13% to 15% per annum||Upto 60 months||Upto 2.25% of the advance amount|
|YES Bank||Rs. 15,000 to Rs. 2 Lacs||–||Upto 24 months||–|
|SBI||Upto 75% of cash limit||2.45% per month||Upto 36 months||Rs. 499 – Rs. 3000|
|HSBC Bank||–||12.99% to 21% per annum||Upto 24 months||2% of the advance amount|
HDFC Bank Credit Card Loans
|Credit Card Loan||Applicable Interest Rates|
|HDFC Bank Insta Loans on Credit Cards||11.92% per annum|
|HDFC Bank Insta Jumbo Loans on Credit Cards||11.92% per annum|
|Cash Withdrawals on HDFC Credit Cards||–|
HDFC Bank offers Insta Loans on Credit Cards where you can avail pre-approved personal loan instantly on your existing HDFC Credit Cards. Insta Loans are offered against the credit limit available on your existing HDFC Card at the time of loan application; Hence, the loan amount varies from card to card and depends upon your credit card history. You can avail the funds instantly in your HDFC Saving Account or collect a demand draft from the bank drawn in your name.Currently, HDFC Bank levies an interest rate equals to 11.92% per annum for Insta Loan on HDFC Credit Cards.
HDFC Bank offers you to avail Insta Jumbo Loans on your existing HDFC Credit Cards, where you can avail funds irrespective of your credit card limit. It means you can avail funds instantly on your existing HDFC credit card where the loan amount can be higher than the current credit limit available on your credit card. HDFC Bank levies an annual interest rate equals to 11.92% for Insta Jumbo Loan availed on HDFC Credit Cards.
SBI Credit Card Loans
|Credit Card Loan||Applicable Interest Rates|
|SBI Card Encash||12.7% – 29% per annum|
|SBI Easy Money||2.45% per month|
|Cash Withdrawal on SBI Cards||3.35% per month (40.2% per annum)|
|SBI Flexipay||11% to 22% per annum|
If you want to avail loan on sbi cards for a longer period of time, then options like SBI Card Encash, Cash Withdrawal at ATMs and Flexipay are best suitable ones. Otherwise, SBI Easy Money is the best option for short term advances.
However, it is important to know a cardholder must have a good repayment track with the bank in order to avail SBI Card Encash facility. The cardholder can avail funds on annual interest rate ranging between 12.70% to 29% for a tenure ranging from 12 months to as long as 36 months. With Encash, an eligible cardholder can avail advance from minimum Rs. 10,000 to upto as high as equal to the credit card limit and sometimes above, with a one time processing fee equal to 2% of the advance amount subject to range from Rs. 499 to upto Rs. 3000.
As for the SBI Easy Money is concerned, it is a good option for you if you are looking to avail funds for a maximum period of 45 days only. With Easy Money, an eligible cardholder can take advance from minimum Rs. 5000 to as high as equal to 75% of the credit card limit. The cardholder has to pay an interest of 2.45% per month on the advance amount along with a one time processing fee of minimum Rs. 149 to as high as 1.5% of the advance amount.
Whereas in case of flexipay facility, the cardholder can access funds from a minimum of Rs. 2500 to as high as available credit limit with an annual interest rate ranging between 11% to 22% for a tenure as long as 36 months. On the other hand, cash withdrawal on SBI credit card is the most costly method to avail funds, costing interest rate as high as 40.20% per annum while the maximum funds a cardholder can access in a day is Rs. 12,000 to Rs. 15,000, depending upon what sbi credit card one holds.
Credit Card Loan Eligibility Criteria
- You need to have a credit card at first instance and needs to have a pre-approved limit.
- One must have a very good credit history and a good borrowing & repayment pattern in order to be eligible for a credit card loan.
- The minimum amount mostly starts from 2,000 and the maximum borrowing can go upto Rs. 10 Lacs.
You will get call from the bank if you are pre-approved for a credit card loan. You can visit on the bank’s website at any point of time to get the loan or call the toll free numbers to talk to the bank’s representative.
How to Apply for Credit Card Loans?
You will get a call from the bank if you are pre-approved for a credit card loan. You can visit on the bank’s website at any point of time to get the loan or call the toll free numbers to talk to the bank’s representative.
Difference between Credit Card Loans and Personal Loan
For a personal loan you have to visit the branch with documents and in case of credit card loan the whole process is documentation free.
The rate of interest also differs as personal loan interest rate ranges between 11% to 26% per annum and credit card loan interest rate ranges between 13% to 32%. For credit card loan a credit card is must while for the personal it’s not.