Financial emergencies can arrive at any point, and delays in securing funds in such situations can often have adverse consequences. In a scenario like this, access to a financial instrument without any deferrals is necessary. This is where a loan against a credit card comes to the rescue.
As the name suggests, a loan against a credit card is a credit option where a person can get a loan against a credit card. The idea here is to allow the credit card holder to manage any financial need without the long application and documentation process. But the question is how to get a loan on a credit card. Well, let’s find out.
How to get a loan on a credit card?
Here is a brief guide on the process of applying for a loan against a credit card –
- Head over to the official website of the credit card provider.
- Then fill up the consequent application form and submit it with the required documents.
- After the submission, the credit card provider will review the application and verify the documents.
- After successful verification, they will approve your loan.
Benefits of taking a loan against a credit card for emergency expenses
- The credit card loan doesn’t require any documents or collateral to submit.
- The loan is disbursed immediately to the account right after the approval. Thus it becomes a good option to support any financial adversity.
- It is easy to pay off the loan through flexible EMIs over a suitable period.
Things to consider before taking a loan against a credit card
Here are a few highlights to consider before taking a loan against a credit card–
Loan amount and tenure
The applicable loan amount against a credit card depends on the credit limit. Depending on the current credit limit, the applicant will be eligible for a loan amount as the lender decides. Having said that, if someone is paying only the credit card minimum due amount, then consulting with the lender regarding eligibility is necessary.
The next point to review is the interest rate applicable to a credit card loan. Since the interest rate will change as per the lender’s selection, check the interest rate before opting for a loan.
The lenders charge a processing fee to disburse a credit card loan and like the interest rate, this also changes as per the issuer’s policies. The ideal thing to do here is to check the details and compare the additional charges to see which credit card provider offers the best deal.
On the other hand, some lenders sanction zero processing fee credit card loans, so take note of that and then decide the suitable option.
You can close this loan before completing the tenure with a certain amount of the pre-closure charge. This charge varies from one credit card provider to another. Check this pointer carefully before signing the loan agreement, as it can increase your total repayment cost.
Additional terms and conditions
The next point to check here is the additional terms and conditions associated with the loan. An applicant can learn more about this when going through the loan agreement’s fine print. It will consist of hidden charges, late payment fees, etc. Know about all these pointers to make an informed decision.
Also Read: How to Avoid Credit Card Late Payment Charges?
Credit card loans can be a great option to meet any urgent financial need without opting for a separate financing option. Get a chance to save time and address the issue at hand without any delays. However, keep the above-mentioned pointers in mind to make an informed decision and avoid long-term consequences.