Owing to the growing credit card market, even food-delivery and payment gateway companies are coming forward to be a part of the same. Credit card companies are also offering lucrative features to attract more customers in this highly competitive market.
One such feature that has become quite beneficial for customers is emergency personal loans on credit cards.
Availing a personal loan is the most efficient way to deal with these emergencies. However, the approval process can take up to a couple of days. Thus, individuals can look for a personal loan against credit cards during any financial emergency. It is a pre-qualified loan that doesn’t need any further documentation and verification.
What is a personal loan against a credit card?
It is one of the easiest and quickest ways to avail financial help to commit monetary needs in an emergency. In India, several NBFCs provide this facility for the cardholders with hassle-free procedures.
However, individuals often get confused between the cash withdrawal facility and emergency loan feature of a card. Every credit card comes with a specific credit limit that is the highest limit of spending and also with a cash withdrawal limit.
Financial institutions determine the personal loan amount depending on the available credit limit on a card. Thus, when the cash withdrawal limit is not sufficient for an urgent financial need, a personal loan against credit cards can serve the purpose in a better way.
Moreover, some financial institutions charge various fees and higher interest on cash withdrawals than loans against a credit card.
So, this is also an economical way to raise funds to meet short-term and unpredictable financial needs. Nevertheless, before availing, applicants need to know and assess the reasons to opt for personal loans on credit cards.
Eligibility criteria:
As a first step, applicants need to meet the eligibility criteria to apply for this loan facility –
- Applicants must have a high credit score above and around 750 with an excellent credit history.
- Repayment behaviour of individuals needs to be regular, well-organised, well-managed, and also with zero default payment.
- High incomes also increase the loan eligibility of borrowers.
Moreover, this also helps to enhance the credit limit and eventually, the loan amount.
Within minimum eligibility criteria, availing a personal loan on credit cards becomes all the more convenient. This feature is also one of the reasons why credit cards are better than debit cards.
Application process:
As this financial facility is widely used for emergency purposes, the application process is easy and simple. Individuals can apply for credit cards online and offline.
Online mode –
Here are the steps to avail this loan via online-
- Firstly, applicants have to visit the authorised website of their preferred financial organisation from which they have already availed the credit card.
- Then, as per the process, individuals are required to submit their credentials along with the application form.
- Once the lender verifies the details, the loan amount will be disbursed to the applicants’ accounts.
Offline mode –
Also, individuals can visit the nearest branch of the lender along with the required documents to avail this loan facility.
Factors to consider before applying:
Before applying, individuals should check the rate of interest and processing fees on such loans. Few credit cards don’t charge any interest during a specified period.
One example of the same is the Bajaj Finserv RBL Bank SuperCard. Cardholders can avail an emergency personal loan without any interest for up to 90 days. They can repay the loan in 3 easy EMIs. It is one of the two industry-first features of this product, the other being ATM cash withdrawal with zero interest for up to 50 days.
Personal loans on credit cards are one of the most effective ways to meet financial requirements during emergencies. Borrowers must ensure to repay the loan in time and manage their credit card responsibly to keep their credit history healthy.
