What is a loan against a credit card?
A loan against a credit card is an instant funding option that allows cardholders to convert the available cash limit into a personal loan. Cardholders can avail of the loan with no additional paperwork.
The Bajaj Finserv RBL Bank SuperCard comes with the facility of a loan against a credit card. You can avail of this benefit for 3 months at a nominal interest rate and zero processing fee.
How credit card loans operate
Bajaj Finserv RBL Bank SuperCard works as a loan card. Here is an example of how: Sushant has a credit card limit of Rs. 2 lakh. He can call RBL Bank customer care at 022-62327777 and get the entire available card limit converted into a personal loan. Within 24-48 hours, he will get the money credited to his bank. Sushant can pay this loan back in three EMIs. He has to pay a nominal monthly interest of 1.16%.
Features of a loan against credit card*
The following features make the loan against a credit card beneficial:
- Convert your available cash limit into a personal loan for 3 months
- A nominal interest rate of 1.16% per month
- Avail the loan with zero processing fee
Eligibility for a loan against credit card*
The following is the eligibility criteria for a loan against credit card:
- A strong credit history
- A reliable repayment history of credit card bills
An emergency advance on the Bajaj Finserv RBL Bank SuperCard is available through a simple online request and no additional documents.
Documents required to get loan against a credit card
When it comes to obtaining a loan against a credit card, there are a few documents you will need to provide. Here’s a list of the essential documents required:
- Identity proof (Aadhaar card, Voter ID, Passport, etc.)
- Address proof (Utility bill, rent agreement, driving licence, etc.)
- Income proof (Salary slips, bank statements, ITR, etc.)
- Credit card statement
- A valid, active credit card
- Passport-size photographs
- Duly filled loan application form
Advantages of a loan against credit card*
A loan against a credit card is a unique financial tool that provides several advantages to cardholders. Here are some of the benefits of availing a loan against credit card:
- Instant availability: One of the significant advantages of a loan against credit card is its instant availability. These loans usually do not require extensive documentation, making them quick and hassle-free to obtain.
- No need to exhaust credit limit: Unlike traditional loans, loans against credit cards do not require you to exhaust your credit limit. Instead, these loans allow you to borrow a certain percentage of your available credit limit.
- Lower interest rates: Loans against credit cards often come with lower interest rates than traditional loans, making them more affordable.
- Flexible repayment options: These loans typically come with flexible repayment options, enabling you to choose a repayment period that works best for you.
- No collateral required: Loans against credit cards do not require any collateral, making them a safer option than secured loans.
Who can take a credit card loan?
While anyone with an active credit card can apply for a loan against it, certain conditions must be met:
- The credit card account must be active and in good standing.
- The credit limit must be sufficient to cover the loan amount.
- The applicant must have a regular income source.
- The applicant must be at least 18 years old.
- The applicant must have a good credit score.
It's important to remember that taking a loan against a credit card should be a carefully considered decision. Borrowing only what you need and repaying it promptly will help you to avoid unnecessary debt.
How to apply for a loan against credit card?
Here's how to apply for a loan against your credit card:
- Check your credit card's terms and conditions for eligibility.
- Contact your bank or financial institution to inquire about their loan against credit card options.
- Submit the required documentation, including your income proof and credit card statement.
- Decide on the loan amount and repayment period as per the bank's terms and conditions.
- Sign the loan agreement and accept the terms and conditions.
- Withdraw the loan amount from your credit card or receive it directly into your bank account.
It is essential to understand the terms and conditions associated with a loan against credit card before applying. Ensure that you are aware of the interest rates, repayment period, and fees involved with the loan to make an informed decision.
Conclusion
Availing a loan against a credit card provides additional benefits compared to a typical personal loan. However, many credit card users are unsure about the difference between taking a loan against a credit card and withdrawing cash using a credit card. It's essential to understand that a loan against a credit card is offered by banks, utilising your unused credit card limit while retaining your existing credit card. In contrast, withdrawing cash using a credit card involves utilising the current limit of your credit card and is not considered as borrowing a loan from a bank.
Frequently asked questions
Yes, you can borrow money using the Bajaj Finserv RBL Bank credit card. You can avail of a loan against a credit card at a nominal interest rate of 1.16% per month with no additional paperwork.
Your loan amount depends on your available unutilised credit limit of the card.
You can get a loan against a credit card by visiting the bank’s nearest branch. You can also avail a loan online by visiting the issuer’s official website.
A loan on a credit card is a type of personal loan option available against the unutilised credit limit of the card.
Yes, you can get a loan on your credit card. The Bajaj Finserv RBL Bank SuperCard, for instance, offers a loan facility in addition to its credit card features.
The loan amount you can borrow on a credit card varies depending on the bank and the credit card you use. With the Bajaj Finserv RBL Bank SuperCard, you can avail of loans equal to the unutilised credit card limit.
With the Bajaj Finserv RBL Bank Credit Card, you can pay the loan in 3 EMIs.
Bajaj Finserv RBL Bank Credit Cards offers facility to convert cash limit into a personal loan for 3 months with zero processing fee and an interest rate of 1.16% per month.
Loans on credit cards work by allowing users to borrow money against their available credit limit. The borrower can select a loan amount and repayment period, and interest rates and processing fees are charged on the loan.
To apply for a loan on a credit card, you will typically need to submit documents such as income proof, credit card statement, identity proof, address proof, and a loan application form.
Factors such as credit score, income, credit card history, and credit card limit utilisation can affect your eligibility for loans on credit cards.
Additional charges such as interest rates, processing fees, prepayment penalties, and late payment fees may apply when taking a loan on a credit card.
A loan taken against a credit card is borrowing a specific amount against the available credit limit. On the other hand, a cash withdrawal using a credit card is withdrawing cash against the maximum cash limit of a credit card. Loans taken on credit cards usually have lower interest rates and fees than cash withdrawals, so it is advisable to opt for a loan on a credit card instead of cash withdrawal.
Yes, you can use a personal loan to pay off your credit card debt. It can help consolidate your debts and potentially lower your interest rates.
Taking a loan on your credit card decreases your available credit limit. It’s important to make timely repayments to avoid penalties and maintain a good credit score.
You can reach out to your credit card issuer and request them to convert your credit card balance into a personal loan. You could also do a balance transfer to convert your outstanding balance into a new loan account. Depending on your card variant, the Bajaj Finserv RBL Bank Credit Card also provides the option to convert your outstanding balance above Rs. 2,500 into EMIs.
There are different interest rates and repayment terms that come with credit card loans, depending on the bank and the specific credit card. It’s important to reach out to your preferred credit card company for clarity on these terms and rates before applying for a new credit card.
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