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Loan on Credit Card

Loan on credit card is offered on specific credit cards and is linked to the card limit. There are certain terms and conditions for getting a credit card loan. Credit cards that come with a loan feature prove extremely convenient when you are in urgent need of funds.

Top Banks Offering Loan on Credit Card

There are several top partner banks offering a loan against a credit card. Here’s a quick look at them. 

  • RBL Bank 

If you hold an RBL Bank credit card, you can quickly apply for a credit card loan through the bank’s online credit card portal. Alternatively, you can also call the bank’s customer care number - 022 71190900 to avail the facility as well. 

  • Axis Bank 

You can apply for a loan on a credit card through four different ways - by sending an SMS, by logging into your credit card internet banking account, through the Axis mobile application, or by calling the customer care cell at 1860 419 5555 or 1860 500 5555.

  • SBI Card

With SBI Card’s Encash facility, you can instantly get a loan against your credit card with tenures ranging from 12 to 48 months. The minimum amount that you can avail as a loan is ₹25,000, with the maximum amount being determined by your available credit limit. 

  • Citibank 

The Citi Quick Cash is a feature designed to provide you with instant loans against a credit card. With tenures ranging from 6 months to 48 months, you get the freedom to choose your repayment period. You can avail this feature within a few minutes using the Citi Mobile application. 

  • ICICI Bank 

ICICI Bank offers loans on credit cards at attractive interest rates ranging from 14.99% to 15.99%. You can even opt for tenures of up to 60 months. Applying for the loan is very easy and can be done by logging into your internet banking account or iMobile application. Alternatively, you can also give a missed call on 080 45936070. 

  • DBS Bank 

With DBS Bank credit cards, you can avail loans up to the available credit limit at very low interest rates and flexible tenures of up to 60 months. All that you need to do is apply for the loan via your DBS internet banking portal or the DBS mobile banking app. 

Features and Benefits of Credit Card Loan

  • Only basic documentation is required

  • Easy-to-fulfil eligibility criteria

  • Emergency access to cash

  • Loans are pre-approved and disbursed instantly 

  • Tenures are flexible 

  • Interest on credit card loans are on par with personal loans

Eligibility Parameters for Getting a Credit Card Loan

A credit card loan is offered to select cardholders only. To be eligible for the credit card loan facility, you would need to have a stellar credit history, a good credit score, and a consistent, reliable spending and repayment pattern. If you are regular with your credit card bill payments and do not carry over any outstanding dues, the chances of you securing a loan against your credit card will be higher.

Documents Required for a Credit Card Loan

1. Identity Proof: (any one of the below)

2. Address Proof: (any one of the below)

  • Electricity bill

  • Ration card

  • Passport

  • Driving Licence

  • Telephone bill

  • Last two months’ bank statement

  • Voter ID

3. Income Proof: (any one of the below)

  • Latest payslip

  • Form 16

  • Income Tax Return statement

4. Age Proof: (any one of the below)

  • Tenth standard school certificate

  • Birth Certificate

  • Passport

  • Voter ID card

5. Other Documents

  • PAN card photocopy

  • Form 60 (in case you do not hold a PAN)

Interest Rate and Charges on Credit Card Loans 

The interest rate applicable on credit card loans tends to vary from one bank to another and is also dependent on factors such as your credit score, available credit limit, your eligibility, and the amount of loan that you opt for. Typically, the minimum amount of interest rate that banks charge on loans against credit cards is around 1.25% per month, which comes up to 15% per annum. 

Fees and Charges for Availing a Loan Against a Credit Card

For availing credit card loans, card issuers generally charge around 2% of the total amount of loan as processing fees, with a minimum and maximum cap. That’s not all. You will also be levied a foreclosure charge of about 3% of the outstanding balance plus GST if you decide to close the loan prematurely. And depending on the credit card issuer, you may also be liable to pay a cancellation charge for cancelling the loan against the credit card. 

How Does a Loan on a Credit Card Work 

If you require a lump sum amount to take care of your emergency financial needs, you can leverage the available credit limit on your card and avail a loan for a tenure of your choice. You will be required to repay the loan in Equated Monthly Instalments throughout the tenure that you chose. Also, the amount that you borrow will be blocked on your card and will be released part by part as you continue to make repayments.  

How to Apply for a Loan Against Credit Card

You can apply online for a credit card loan only if your card is registered for net banking.

To register your card, log into net banking and follow the steps given below

  • Click on the cards tab

  • Select the ‘Transact’ menu on the left

  • Select ‘Register New Card’

  • Fill in the details and click ‘Submit’.

If you want to apply offline for a loan against a credit card, visit your nearest bank branch.

Personal Loan on Credit Card

If you want to get a personal loan on a credit card, then you should have a good payment history, transaction pattern and also, a good track record with respect to your credit card spending.

To Apply:

  • Log in to your internet banking account or mobile app and make your application in the credit card section.

  • Call customer care

The fund transfer to the customer's account usually takes place within 3-4 working days. In case a customer opts for a demand draft mode of transfer, the demand draft delivery can be expected within 7 working days.

FAQs about Credit Card Loan

✔️Can I get an instant credit card loan?

Yes, many banks offer instant loans on credit cards and immediately transfer the funds to your bank account. 

✔️Will interest be charged on my credit card loan?

Yes, interest will be charged on a credit card loan.

✔️Is a loan on a credit card different from cash withdrawal using a credit card?

Yes, a CC loan is different from a credit card cash withdrawal. The cash withdrawal limit on credit cards is lower than the amount that can be borrowed as a loan. Also, the interest rate on CC loans is lower than the interest applicable in the case of a cash withdrawal using a credit card.

✔️How much loan can I get on a credit card?

Different banks have their own caps with regards to loans on credit cards. Some of these amounts are mentioned below:

  • HDFC Bank: Maximum loan amount of ₹5 Lakhs

  • IDBI Bank: Minimum loan amount of Rs. 50,000. Maximum loan amount of ₹5 Lakhs

  • Kotak Mahindra Bank: Maximum loan amount of ₹5 Lakhs

✔️Is it good to take a loan on a credit card?

Loan against credit card is an excellent option for those who need immediate cash to deal with an urgent and unpredictable personal situation.

✔️Can every person having a credit card get a loan on a credit card?

No. Credit card issuers only offer this facility to certain cardholders who enjoy a good relationship with them. 

✔️ What’s the difference between loan on credit cards and cash withdrawal using a credit card?

A loan against credit card is a loan, which means that you can repay it in EMIs over a chosen tenure. A cash withdrawal is a cash advance, where the sum withdrawn by you continues to incur interest till the time you repay it fully.