Personal Loan On Credit Card
Personal loan on credit card is a good financial option when in need of funds, but with Freo you will have a ready line of credit that you can borrow from whenever you need money, 24/7
Have you ever found yourself in a financial dilemma where you needed funds immediately but weren’t able to manage them? There is a solution that you can fall back on! If you own a credit card, it is easy to apply for a personal loan on a credit card when you are in need of immediate funds.
Credit card loans are pre-approved, unsecured loans which often do not need documentation. Therefore, they are the quickest way to raise funds to cover your financial needs
What is Loan Against Credit Card?
Have you ever wondered how to acquire quick cash with your credit card? A loan against a credit card allows you to use your available credit limit for instant liquidity. This service enables fast access to money without the need for additional documentation or collateral. You just borrow the funds required and repay them in instalments, along with interest costs.
Loan on Credit Card – The Misconception
It’s a common misconception to think that if you apply for a loan on your credit card, the bank will increase the credit limit on your card and allow you to withdraw the cash through your card. The fact is that a credit card loan is a kind of personal loan that the bank provides you against your existing credit card.
The amount you can borrow is up to your lender. There is also another option of cash withdrawal from your credit card that you can consider, which often does not need documentation. Therefore, they are the quickest way to raise funds to cover your financial needs.
Credit Card Cash Withdrawal
Credit cards often allow you to withdraw cash equivalent to anywhere between 40-80% of your credit card limit, with a cap on your daily limits as well in some instances. If you go above the credit limit, you will need to pay an over-limit fee and also the usual interest rate on a cash advance.
Key Features of Loan Against Credit Card
Many banks provide attractive personal loans on credit cards.
Here are some key features you should know about:-
Preapproved & Quick
Firstly, most of these loans come pre-approved, so no extra paperwork is needed, and the funds get disbursed quickly, providing you with an instant loan on the credit card.
Convenient & Affordable
Secondly, with EMI plans from your card issuer, you can split pricey purchases into manageable payments. Some banks even allow balance transfers from other credit cards to your current one via EMI schemes, making it easier to consolidate debt and pay off instalments.
Flexible & Accessible
Lastly, lenders offer flexibility by letting you take out loans either within or beyond your existing credit limit.
Benefits of Taking a Credit Card Loan
Apart from the excellent features of credit card instant loans explained in the previous section, there are other numerous benefits attached to it like the following
Quick & Direct
The funds are directly transferred to your bank account for easy access and use. You can get instant access to the borrowed amount right when you need it most.
Low Interest Rates & Fees
These loans generally come with favourable interest rates, making them an affordable option for financing needs. Processing fees for these loans are low, which also helps in keeping their cost down.
Straightforward Application Process
whether online or over the phone, you can complete the application process for a credit card loan in just a few steps from anywhere at any time.
Convenient Repayment
Monthly instalments billed directly to your credit card make managing payments simple and stress-free over a typical period of up to two years.
When is the Right Time to Apply for a Credit Card Loan?
If you are a credit card holder facing unexpected expenses, a loan against your credit card might be an option. To qualify, you need to bank with the issuer of your card since only some banks offer these loans to new customers. You also need a valid credit card and good repayment history.
Before applying, check your credit history via online banking or at your local branch. Be aware that if you request more than what’s available on your unused limit, the bank might temporarily suspend your card until the balance drops below this limit again.
How to Apply for a Credit Card Loan With Freo?
There are crucial factors that differentiate personal loan on Freo Credit Card 2.0 from personal loan on other credit cards. Such as:
Interest Rate
Freo’s monthly rate of interest at 1.08-2.33% is comparatively lower than other credit cards, which are typically at 2.5% per month.
100% Cash Withdrawal
Freo is the only credit card in India that allows 100% cash withdrawal. You can withdraw 100% cash from your approved credit line anytime from anywhere with an option to transfer it to your bank account.
Some other benefits are as follows:
How Freo Credit Card Works
Here’s an example:
Rahul’s best friend needed a sum of 1.5 Lakh immediately for an emergency. Rahul wanted to help his best friend in his time of need. He thought of using his credit card, which had a credit limit of 2 Lakh. However, he was disappointed to know that he could withdraw only 40% of his credit limit, which amounts to ₹80,000, which doesn’t meet his friend’s current requirement.
While researching online, he came across Freo, which offered him an instant credit card with 100% cash withdrawal. He had to pay only 1.08% interest per month (13% per annum) as compared to the traditional credit cards, where he would have paid as high as 2.5-3% per month (30% – 36% per annum).
So, What Do You Think Rahul Did? What Would You Do?
Rahul, for obvious reasons, chose to get Freo's personal loan with a credit card. He was able to get instant approval, and Freo Credit Card 2.0 is the only credit card in India to offer 100% cash withdrawal. He had 24×7 access to money with an option to transfer it to their bank account.
Not only was he able to help a friend in need, but he also had leftover available credit for his own needs. Not only was that, but his credit was set back to the entire amount as he paid his EMIs.
Let’s see the comparison he did:
What is your plan of action when you do not have sufficient funds, and you need immediate cash or credit? A personal loan on a credit card can be an option. You can borrow against your credit card limit. Often, it is a viable and quick option for funds.
Still, at times, the terms of the credit card company might be so that the loan against the credit card could be limited or have other terms attached.
Eligibility Criteria for Freo Credit Card
Minimum salary/income:
In-hand ₹ 20,000/month
Minimum age:
Above 23 years and below 55 years
Aadhar Card
ID Proof
(Driving license/Voter's ID/Passport/ Aadhar/PAN)
Address Proof
(Driving license/Voter's ID/Passport/ Aadhar/Utility bills/Scheduled bank statements)
Original photograph
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FAQs on Personal Loans on Credit Card
Can anyone with a credit card get a loan?
No. When it comes to credit card loans, each bank or issuer has its eligibility criteria. A credit card loan is offered to select cardholders based on his/her credit standing and credit repayment history.
What are the advantages of a credit card loan?
Here are a few advantages of a loan on a credit card:
Instant cash whenever you need it.
No documentation is required.
Attractive and reduced rates of interest than interest on cash withdrawals on credit cards.
Fast processing and quick disbursal upon approval.
You can apply for it online from anywhere at any time.
Repay the loan in monthly instalments.
Low processing fee.
Flexible loan tenures.
Advantages of Personal Loan on Freo Credit Card 2.0
Low interest rate of 1.08% per month
Only credit card to offer 100% cash withdrawal
Instant approval
24×7 access to money with an option to transfer it to their bank account
Quick disbursal
Flexible loan tenures – 2 months to 36 months
What is the difference between withdrawing cash from a credit card and getting a loan on a credit card?
The major difference is in the interest charged. Banks charge a higher rate of interest on cash withdrawals on a credit card than on a loan against a credit card. With Freo, the interest charged on cash withdrawals and personal loans on credit cards is 1.08% to 2.33% per month.
Can I convert all my purchases to EMI with a Freo loan on a credit card?
Yes. With Freo, you can convert all your purchases above ₹3,000 to EMIs.
How do loans on credit cards work?
Using your credit card for purchases means you are borrowing money from the company that issued the card. Similarly, you can take out loans up to your available credit limit. These loans come with an interest rate you need to pay back over time.
What are some of the factors that affect my eligibility for credit card loans?
When it comes to determining your eligibility for credit card loans, several factors come into play. Lenders tend to offer these loans to cardholders who have maintained strong credit scores and demonstrated reliable repayment habits over time. Additionally, a steady increase in income can positively impact your chances of qualifying for such loans.
How is a loan on a credit card different from a cash withdrawal using a credit card?
When you borrow money using a credit card, it can be through a loan or cash withdrawal. The main distinction lies in the limits and interest rates. Typically, the amount you can withdraw as cash is lower than what you'd get from a loan on your credit card. Moreover, withdrawing cash usually incurs higher interest rates compared to taking out a loan via your credit card.
What are the extra charges for a credit card loan?
When taking a loan on your credit card, expect to pay an initial processing fee. Additionally, if you choose to repay the loan early, there might be a pre-payment penalty.
The benefits of a credit card and a personal loan are rolled into one with Freo’s personal line of credit.
Get your credit line today.
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