In times of financial need, having quick access to funds with minimal paperwork is a real lifesaver. For most, a Loan on Credit Card is the most convenient and hassle-free solution available. It permits credit cardholders to use their available credit limit for short-term financing, an increasingly popular option for handling emergencies or unexpected expenses. In this blog, we will discuss what a Loan on Credit Card is, its benefits, and the criteria for eligibility.
Understanding Loans Against Credit Cards
A loan based on a Credit Card allows you to access cash support without having to apply for a new loan. You can get money by converting your unused credit limit into cash that will be deposited into your bank account, thus instantly providing you with the liquidity you require. Unlike traditional loans, which require extensive paperwork or collateral, a Loan on Credit Card requires you to use your already established credit line as its form of security.
Loans on Credit Cards are one of the best alternatives for urgent expenditures since they do not involve long processing time and are very flexible. Through a Credit Card loan, you can get instant access to funds to pay off for emergencies or planned expenditures without breaking into savings or investments.
Benefits of Taking a Credit Card Loan
A Credit Card loan is a particularly attractive choice for those seeking instant cash. Some of the key advantages include:
- Instant Access to Funds
Credit Card loans give you instant access to money. After approval, the loan amount is directly credited to your registered bank account, so you can use it right away. Also, there are no restrictions on the usage of funds; thus, you can use the money for any purpose, be it medical treatment or travel.
- No Collateral or Documentation Hassles
Unlike traditional loans, Loans on Credit Cards are not necessarily tied up with any form of collateral or excessive documentation. The reason is that your Credit Card acts as collateral; therefore, you do not need to mortgage other collateral or submit other paperwork in addition to the application itself. This process is much easier, saving both time and effort.
- Lower Interest Rates Compared to Cash Withdrawals
With a Credit Card loan, you usually pay less than you would for a regular Credit Card cash advance.
- Easy Application ProcessÂ
Credit Card loans are very easy to apply for, and it can be done from anywhere. Leading banks such as ICICI Bank provide an online process to avail Loan on Credit Card. The process usually involves logging in to your account in the iMobile app or through net banking on the website.
- Low Processing Fees
A loan on a Credit Card generally poses lower processing fees when compared to other credit offerings. This low-fee processing makes this loan cost-effective, especially where finance is required for a relatively very short period.
- Repayment Flexibility with Monthly Instalments
Repayment of a Loan against a Credit Card is made easy through monthly EMIs or Equated Monthly Instalments. This repayment format makes it easier to handle the loan because your EMIs are directly billed onto your Credit Card statement, helping you track payments effectively.
Eligibility Criteria for a Loan on Credit Card
Credit Card loan eligibility varies from one lender to another but has a few common factors that come into play. Here is what major Banks like ICICI Bank typically look for:
- Good Credit Score
A strong credit score increases your chances of loan approval through a Credit Card. Generally, Credit Card issuers like ICICI Bank look for scores of 750 or higher.
- Good Payment History
Lenders also consider the payment history. A Credit Card payment history of on-time payments shows lenders that you are capable of handling credit responsibly.
How to Apply for a Loan on a Credit Card?
Loans against Credit Cards are an efficient route through which you can secure funds at the time needed most. Here’s how you can apply for credit card loan with ICICI Bank:
- Check Your Eligibility
First, log into either ICICI Bank Internet Banking or the ICICI Bank’s iMobile pay application. Click on ‘Credit Card’ and check the offers section to see if you are pre-approved for a loan through your credit card. Here, you will also see the eligible credit amount based on the advance.
- Go Through the Terms
Carefully review all the terms of the ICICI Bank’s loan before applying for it. The terms will carry on all these details about interest, repayment, processing fees and other levies. Pre-understanding the terms and conditions of this loan helps avoid possible shocks or surprises later in the long run.
- Submit an Application
One can submit an application in case they agree to the terms by proceeding online through a banking portal or a customer care department.
- Receive Funds
Once the application is approved, the loan amount will be directly credited to your ICICI Bank savings account. In case you are a non-ICICI Bank account holder, the funds may take a few days to get credited into your account.
Conclusion
Obtaining a loan on your Credit Card can be a smart and efficient solution for addressing immediate financial needs. With its easy application process, no collateral requirements, and the ability to access funds quickly, a Credit Card loan can provide the relief you need in times of crisis. By ensuring you meet the eligibility criteria and understand the terms of the loan, you can make informed decisions that align with your financial goals.
Also Read: Can an Online Loan Help You Consolidate Your Credit Card Debt?
