How could you take out a loan on a credit card?
Credit cards are widely popular for allowing customers a line of credit that they could use for making purchases and availing services. But the scope of credit cards is not just limited to that. One can also use credit cards for a number of other things like withdrawing cash and availing a loan against the credit card.
What is a loan against a credit card?
Banks and credit card companies often allow people to avail a loan against their unused credit limit. The term credit limit refers to the maximum amount of credit a financial institution extends to a client.
Therefore, a customer owning a credit card can be allowed a personal loan within their credit limit in cases of financial emergency. The Bajaj Finserv RBL Bank SuperCard, arguably the best credit card in the market, also allows its users to avail a personal loan in circumstances when they need financial aid.
Features of a personal loan against credit card
Credit cards allow cardholders to take loans against credit cards.
- It’s an emergency loan that’s available on the basis of your unused credit limit
- The loans come at some of the most attractive interest rates. In the case of the Bajaj Finserv RBL Bank SuperCard, you can enjoy a 90-day period of an interest-free loan
- The processing fee is also minimal. The SuperCard charges only a flat processing fee of 2.5% on the loan
- There is no paperwork required. The loan is approved without any documentation hassles. A personal loan for Bajaj Finserv RBL Bank SuperCard holders is available only through a simple request made online, with no additional documentation
- Approval time is also minimal. Most of these loans, including the one for the SuperCard holders, are approved instantly
- You can also repay the loan conveniently in just 3 EMIs.
Eligibility for a personal loan against credit card
Just like with your credit card, personal loans are also based on some basic factors that revolve around your credit history and your repayment habits. The decision, although solely on the lender, can be easily influenced by your actions. Here are some tips and tricks on how to increase your chances of being eligible for a loan against your credit card.
- Boost your credit score: Any decision pertaining to a credit card ultimately comes down to your credit score. A good credit score is something between 700 to 900, and as your score comes closer to 850, it is considered almost ideal by credit card companies. That being said, even a score above 600 is considered decent enough by credit card companies to consider you for a loan. Needless to say, a score below 600 turns out to be not so great and can be a drawback while applying for a loan.
- Pay your dues on time: A great deal of credit score boosts come from repaying your dues on time. This includes both your credit card dues and EMIs on other loans. Every late payment you make does not just dip your credit score but also makes your credit card issuers think of you as irresponsible.
- Low credit utilization ratio: Your credit utilization ratio denotes the percentage of your available credit that you actually end up utilizing. If that ratio is high, it implies that you are heavily dependent on credit. This understandably demotivates credit card lenders, and can also affect your chances of availing a personal loan.
Advantages of a personal loan against your Bajaj Finserv RBL Bank SuperCard
- You can avail of unsecured advance without any collateral because the funds are provided on the basis of your unused credit limit
- Appeal for a personal loan against your credit card can be made online itself
- You can enjoy a 90-day period of an interest-free loan
- Only a flat processing fee of 2.5% is levied on the loan amount
- No documentation required; approval is immediate
The perks of the Bajaj Finserv RBL Bank SuperCard are not limited to just personal loans. You can also withdraw cash from ATMs with the card, and unlike other credit cards, there is no interest applied to the cash withdrawn for up to 50 days. The card is also protected against threats of cyber fraud with features like ‘in-hand security’ and ‘zero fraud liability cover’.