A Step-by-Step Guide to Obtaining a Personal Loan on a Credit Card in India

 

A Step-by-Step Guide to Obtaining a Personal Loan on a Credit Card in India

 

Loan on credit card

In India, credit cards have become an indispensable financial tool for millions of individuals, offering convenience and flexibility in managing day-to-day expenses. However, credit cards can also serve as a means to access instant funds in the form of a personal loan. Known as "loan on credit card" or "credit card loan," this facility enables cardholders to avail themselves of quick financing without the need for a traditional loan application process. In this comprehensive guide, we will walk you through the process of obtaining a personal loan on a credit card in India, covering the key aspects, benefits, and precautions to take.

 

Understand the Loan on Credit Card Facility

Before diving into the application process, it is essential to comprehend the concept of a loan on a credit card. This facility allows credit cardholders to borrow a certain amount from the available credit limit. The borrowed amount is treated as a personal loan and is subject to interest charges, just like any other loan. However, the repayment tenure is relatively short, usually ranging from a few months to a year, depending on the credit card issuer and the terms of the loan.

 

Check Credit Card Eligibility

To be eligible for a personal loan on a credit card, you must first ensure that your credit card offers this feature. Not all credit cards provide this facility, so it is vital to review the terms and conditions of your card or contact the issuing bank to inquire about your eligibility.

 

Review Loan on Credit Card Terms and Interest Rates

Different credit cards may offer varying loan on credit card terms and interest rates. It is crucial to understand the applicable interest rate, processing fees, and any other charges associated with this facility. Take the time to compare the terms and conditions of different credit cards to identify the one that best suits your financial needs.

 

Check Credit Limit and Outstanding Balance

Before applying for a loan on your credit card, verify your available credit limit and ensure that it is sufficient to accommodate the loan amount you require. Additionally, consider your outstanding balance on the credit card, as it may impact the amount you can borrow through this facility.

 

Initiate Loan Request

Once you have assessed your eligibility and understood the terms, you can initiate the loan request through one of the following methods:

 

a. Online Banking Portal: Many credit card issuers provide an online banking portal or mobile app through which cardholders can apply for a loan on their credit card. Log in to the portal, navigate to the loan section, and follow the instructions to submit your loan application.

 

b. Customer Care Helpline: Alternatively, you can contact the customer care helpline of your credit card issuer and request assistance with the loan application process. The customer care executive will guide you through the necessary steps.

 

c. Branch Visit: If you prefer a face-to-face interaction, visit the nearest branch of your credit card issuer and speak with a representative to apply for the loan on your credit card.

 

Provide Required Documentation

Depending on the credit card issuer's policies, you may need to submit some documentation to support your loan application. Commonly required documents include identity proof, address proof, income proof, and bank statements. Make sure to have these documents readily available to expedite the loan processing.

 

Await Approval and Disbursement

Once your loan application is submitted along with the required documents, the credit card issuer will review your request and conduct a quick credit assessment. If your application meets the eligibility criteria, you will receive approval for the loan. The disbursal of the loan amount can be in the form of a direct credit to your bank account, a cheque, or a demand draft, depending on the issuer's policies.

 

Benefits of Personal Loan on Credit Card

a. Instant Access to Funds: The loan on credit card facility provides quick access to funds, allowing you to meet urgent financial needs without undergoing a lengthy loan approval process.

 

b. No Collateral Required: This type of loan is unsecured, meaning you do not need to pledge any collateral to obtain the funds.

 

c. Flexible Repayment Tenure: Credit card loans usually come with flexible repayment tenures, enabling borrowers to choose a tenure that suits their financial capabilities.

 

d. Reward Points and Cashback: Some credit card issuers may offer reward points or cashback on loan transactions, adding extra value to your borrowing experience.

 

e. Improve Credit Score: Timely repayment of the credit card loan can positively impact your credit score, contributing to a healthier credit profile.

 

Precautions to Take:

a. Borrow Responsibly: While the loan on credit card facility provides quick funds, it is essential to borrow only what you genuinely need and can repay comfortably.

 

b. Understand Interest Charges: Be aware of the applicable interest rate and other charges associated with the loan, as these will influence the total cost of borrowing.

 

c. Read Terms and Conditions: Thoroughly read and understand the terms and conditions of the loan to avoid any unexpected surprises during the repayment process.

 

d. Avoid Multiple Loans: Taking multiple credit card loans simultaneously can lead to a debt trap, so exercise caution and borrow wisely.

 

Overview

Obtaining a personal loan on a credit card in India can be a convenient and efficient way to access quick funds when needed. By understanding the loan on credit card facility, reviewing eligibility, and comparing terms, you can make an informed decision and choose the right credit card for your financial requirements. However, it is crucial to borrow responsibly, keeping in mind the interest charges and repayment capability to ensure a positive borrowing experience and maintain a healthy financial profile.

 

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Free Finance Services™ deals in every financial product like personal Loan, home Loan, business Loan, Loan against property,  OD CC limit etc. Free Finance Services is a leader in providing Loan related services. Our aim is to give greatest Loan deal to our clients in the competitive market. FREE FINANCE is commenced by a group of experienced persons in the field of financial services mainly related to Loans.

Our Services at a Glance (Call us-9910831827) *T&C APPLY

Salaried Personal Loan | Home Loan | Loan Against Property | Car Loan | Business Loan | OD CC Limit |

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Note: CIBIL Defaulter Do Not Call Us.

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Key Considerations Before Applying for a Salaried Personal Loan

 

Key Considerations Before Applying for a Salaried Personal Loan

 

About Personal Loan

A personal loan can be a valuable financial tool for salaried individuals seeking quick funds to address various needs, whether it's consolidating debts, covering medical expenses, planning a vacation, or funding a home renovation project. Before applying for a salaried personal loan, it is essential to take certain factors into consideration to ensure a smooth and successful borrowing experience. This comprehensive guide will delve into the key aspects that individuals should evaluate before applying for a salaried personal loan, helping them make informed decisions and manage their finances responsibly.

 

Assess Your Financial Need

The first step before applying for a salaried personal loan is to assess your financial need. Clearly identify the purpose for which you require the loan and calculate the exact amount you need to borrow. Avoid borrowing more than what is necessary to prevent unnecessary debt burden and increased interest payments.

 

Check Your Credit Score

Your credit score plays a pivotal role in determining your loan eligibility and interest rate. Before applying for a personal loan, obtain a copy of your credit report and check your credit score. A high credit score signifies a good credit history, which improves your chances of loan approval and can help you secure a lower interest rate. If you find any discrepancies in your credit report, make sure to rectify them before proceeding with the loan application.

 

Research Lenders and Loan Options

Do thorough research on different lenders and the personal loan options they offer. Compare interest rates, loan terms, processing fees, and other charges associated with the loans. Some lenders may provide additional benefits, such as flexible repayment options or prepayment facilities. Choose a lender that best suits your needs and offers competitive terms.

 

Determine Eligibility Criteria

Each lender has specific eligibility criteria for personal loan applicants. Generally, salaried individuals must meet certain age, income, and employment requirements. Ensure that you fulfill these criteria before applying for the loan to avoid any chances of rejection.

 

Calculate the EMI

Before finalizing the loan amount and tenure, use an EMI calculator to estimate the equated monthly installment (EMI) you will be required to pay. This will help you understand the affordability of the loan and plan your monthly budget accordingly.

 

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Consider Prepayment and Foreclosure Charges

In the event that you can repay the loan before the agreed tenure, consider the prepayment and foreclosure charges levied by the lender. Some lenders may impose penalties for early repayment, which can impact your savings on interest payments. Opt for a loan that offers favorable prepayment terms if you foresee the possibility of early loan clearance.

 

Understand Processing Time and Disbursement

Depending on the lender, the processing time for personal loan applications can vary. If you need funds urgently, check the average processing time of the lender and choose one that can disburse the loan quickly without compromising on other essential factors.

 

Read the Loan Agreement Carefully

Before signing the loan agreement, carefully read and understand all the terms and conditions of the loan. Pay particular attention to the interest rate, processing fees, repayment schedule, and any hidden charges. Seek clarification from the lender for any doubts or ambiguities to ensure a transparent borrowing experience.

 

Be Wary of Loan Frauds

Unfortunately, the financial market is not devoid of scams and fraudulent activities. Be cautious of loan offers that seem too good to be true, such as "guaranteed approval" loans or loans with extremely low-interest rates from unknown or unverified sources. Always deal with reputable and licensed lenders to avoid falling victim to loan scams.

 

Avoid Multiple Loan Applications

Submitting multiple loan applications to different lenders simultaneously can have a negative impact on your credit score. Each application triggers a hard inquiry on your credit report, which can lower your score. Choose a lender you are confident in and submit a single application to avoid unnecessary credit score fluctuations.

 

Overview

Applying for a salaried personal loan can be a prudent financial decision if done with careful consideration and planning. By assessing your financial needs, checking your credit score, researching lenders, and understanding the loan terms, you can enhance your chances of securing a suitable loan with favorable interest rates and repayment options. Remember to borrow responsibly and within your means, ensuring timely repayments to maintain a healthy credit profile and financial stability.

 

Free Finance Services™

Free Finance Services™ deals in every financial product like personal Loan, home Loan, business Loan, Loan against property,  OD CC limit etc. Free Finance Services is a leader in providing Loan related services. Our aim is to give greatest Loan deal to our clients in the competitive market. FREE FINANCE is commenced by a group of experienced persons in the field of financial services mainly related to Loans.

Our Services at a Glance (Call us-9910831827) *T&C APPLY

Salaried Personal Loan | Home Loan | Loan Against Property | Car Loan | Business Loan | OD CC Limit |

Quick Contact

Note: CIBIL Defaulter Do Not Call Us.

https://www.freefinance.in/personal-loan.php