Loan Against Credit Card: A Guide to This Easy Credit Facility

  • Published on: 11 Dec 2023
Loan Against Credit Card: A Guide to This Easy Credit Facility

A loan against credit cards is a quick and convenient way to access funds when you need to bridge a monetary gap. Many credit card issuers allow you to avail of an instant loan on the unutilised credit limit of your credit card. The best part about these loans is that you don’t need additional paperwork or follow a long-drawn application process. 

To know more about getting a personal loan against credit cards, read on.

How a Loan Against Credit Card Works

When you need to make urgent payments, like paying school fees, medical expenses, EMIs and more, opting for a loan against a credit card helps you access quick funds. This facility requires minimal to zero documentation because the card issuer already has your details. 

Hence, many such credit card offers are pre-approved, aiding in quick disbursal. You can get a loan amount based on the unutilised credit limit of your card.

Pros of Opting for a Loan Against Credit Cards

A personal loan against credit cards allows you to enjoy various advantages. Some of these benefits include the following:

Available Instantly

Many credit card issuers provide pre-approved offers of a loan against credit cards, allowing you to enjoy instant sanction and quick disbursal. 

Minimal Documentation

As credit card companies already have your personal and financial details, they require you to go through minimal documentation, if any.

Ample Loan Amount

While the loan amount depends on various factors, you can most likely get a higher amount if the unutilised credit limit on your card is higher.

Puts Credit Limit To Good Use

Opting for a loan against credit cards allows you to get a percentage of your unused credit limit as the loan amount.

Flexible Repayment Options

These loan offers also enable you to opt for convenient tenure options. This way, you can repay during a course of time that works best as per your financial capabilities.

Lower Interest Rates

Compared to credit card interest rates, which can even reach up to 50% p.a., these personal loans have much lower interest rates. So, choosing them can be a smart way to keep your borrowing cost low. 

No Need for Collateral

Since these loans are based on your credit card limit, lenders don’t require you to provide any other asset as collateral. 

Who is Eligible to Get a Loan Against Credit Cards?

The eligibility criteria to get a loan against credit cards is based on your issuer and type of card. However, you usually need to fulfil certain conditions to qualify, including the following:

  • Your credit card account must be active 
  • It must be in good standing
  • The card must have enough unutilised credit limit to cover the entire loan amount
  • You must have a stable income source with a good credit score
  • Your age must be over 18 years (and you can’t get a loan on an add-on credit card)

How to Apply for a Loan Against Credit Cards

Here are some steps to follow when you opt for a loan against your credit card:

  • Visit your credit card issuer’s website and check the eligibility requirements and if you have any pre-approved offer
  • Fill in the application form and submit the required documentation, like your credit card statements
  • Choose a suitable repayment option and tenure when the lender approves your loan request
  • Read the loan agreement carefully and sign the document before you proceed
  • The lender will disburse the loan amount to your bank account, which you can withdraw as per your requirements

While you can opt for an instant loan against credit cards without burdening yourself with paperwork, make sure you are aware of the fees and charges. Check if any processing fees applies and ensure you can repay within the chosen tenure to avoid paying high interest penalties. 

If you want a higher loan amount with an affordable repayment structure, consider Fibe’s Instant Cashl Loans of up to ₹5 lakhs. Along with a simple application process, you can also benefit from affordable interest rates and minimal documentation. Download the Fibe Personal Loan App to get funds and fulfil your financial needs immediately!

FAQs on a Loan Against a Credit Card

How can I apply for a loan against my credit card?

You can apply for an instant loan against credit cards by contacting your credit card issuer. You can apply for a new loan against the unutilised credit limit on your card, provided you meet the required eligibility criteria.

Is it possible to opt for a loan on a credit card?

Yes, many lenders allow credit cardholders to apply for a loan against credit cards. You can contact your credit card issuer to inquire if they offer such a loan facility.

How good is a loan on a credit card?

With a loan on a credit card, you can enjoy instant approval, quick disbursal, easy repayment options and ample funding based on your unutilised credit limit.


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