Personal Loan on Credit Cards – Things to Consider

Personal Loan on Credit Cards – Things to Consider


If you have a credit card and if you need some short-term loans, you don’t need to apply for a fresh loan. Yes, you don’t need to go through the complications of the entire loan processes and waste time.

You can now make the most of your credit card facility as you can apply for the personal loan on credit cards. Yes, you can get the required funds without any documentation and instantly. As a result, you can fulfill your needs without waiting!

What is a personal loan on credit cards?

As the name suggests, a personal loan on credit cards offers a loan facility against your unutilized funds in the credit limit. The facility is almost similar to that of a standard personal loan. It is unsecured, needs no security, and carries a fixed interest rate over a pre-decided tenor.

The maximum loan that you can get under this facility can’t exceed the assigned limit on the credit card. The applicable rate of interest will also stay lower than what you are paying on the credit card transactions.

What are the benefits of applying for a loan on credit card?

You can enjoy many benefits if you apply for the personal loan on credit cards such as:

  1. You can get some instant funds to cover your diverse needs without waiting
  2. Compared with cash withdrawals using the credit cards at ATMs, you can enjoy lower interest rates on securing a loan against it
  3. You don’t need to apply again more availing the loan
  4. You can apply for the facility via internet banking or via the app of your service provider. Alternatively, you can also call them to ask for a personal loan on credit cards
  5. There is no waiting time as the loan is pre-approved for you. you get faster processing and quick disbursal after the approval
  6. Repaying the loan in EMIs is possible. The EMI amount will be added to your credit card billing cycle or statement
  7. The tenor of such a loan may be 1 year or more as per your lender’s policy    
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Many reputed companies can offer you the personal loan on credit cards these days. One of them is the Bajaj Finserv RBL Bank SuperCard, where you can get a loan against the credit card to suit your needs quickly. 

What to consider while applying for the personal loan on credit cards?

While there are no issues in availing the personal loan on credit cards, you should consider some aspects to keep all issues away:

     1) Late payments may derail a top-up loan chance

Many lenders provide top-up loans to customers against their credit cards. For this to be applied, you need to have a clear repayment history with no defaults. Thus, if you already have the loan on credit cards, ensure that you don’t make late payments.

     2) Your Credit Score may take a beating for a default

Remember that a payment default is considered as a loan default and not as the default on the part of your credit card. Thus, it can severely affect your CIBIL Score. While credit card defaults also hamper Credit Score, the impact is more in case of loan defaults of all types.

     3) You can foreclose and make prepayments any time

Reputed lenders let you make some part-prepayment or foreclose the running personal loan on credit cards earlier than the scheduled tenor. Although most of the lenders do not charge any fees for these services, some may ask for it. Hence, ensure to make things clear at the time of applying for the loan on credit cards only. 

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     4) Processing charges are of relevance as well

When you apply for the personal loan on credit cards, you also need to pay the processing fees on it. And the extent largely depends on the lender in question. Generally, processing charges on such loans may fall within 1-5%.

The personal loan on credit card is a unique facility that can help you manage your expenses without issues. Applying for it will no more be an issue as you are aware of the concept, benefits and vital elements that you need to consider for it.

Lenders such as Bajaj Finserv come with affordable and attractive pre-approved offers on credit cards, personal loans, home loans, and more. It aims to make the entire loan procedures dead easy and fast.

All that you need to do is share some of your basic information such as name and mobile number to unlock your pre-approved loan offers.

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