Advantages of a Credit Card Loan

Although many people associate the credit card with an extravagant lifestyle that could lead to mounting debts, using a credit card does not automatically mean you would incur debt. If you spend money as you otherwise would and pay your balance in full every month, you can make the most of a credit card's myriad benefits. One of the lesser-known benefits of credit cards is a credit card loan. A loan on a Credit Card is typically pre-approved and is extended to you based on your Credit Card usage and repayment history. Furnished without any documentation or collateral, loans on credit cards come with a fixed rate of interest for a specific time duration. The size of the loan usually does not exceed the credit card limit. Generally speaking, banks offer a loan against your credit card only if you have a positive credit record and therefore, not every Credit Card-holder can get a loan. However, having a credit card with loan access does have several advantages. Read on to know what they are.

Advantages of a Credit Card Loan Although a credit card can be used to make cash withdrawals, a hefty interest must be paid for doing so. Instead, it makes far better sense to take out a loan against a credit card. Here's a comprehensive look at the key advantages of a credit card loan: 1. Immediate Access Credit Card loans are typically pre-approved. This means you can get immediate and hassle-free access to requisite funds without having to furnish any documents or provide collateral. All you need is a good repayment history. 2. Collateral-Free Loans on credit cards are akin to personal loans in that they are unsecured and collateral free. Consequently, there is no need to pledge an asset, provide a guarantor, furnish post-dated cheques, etc. 3. Flexible Repayment Options When it comes to repaying your credit card loan, you may opt for the EMI amount to be debited in your monthly Credit Card

statement. Relatively Lower Rate of Interest A loan against a credit card attracts a lower rate of interest than the interest charged on cash withdrawals on a credit card. Therefore, it is economically more advantageous. 4. Balance Transfer Option If you have multiple credit cards on which you have taken out loans, some banks may offer you the option of transferring the balance outstanding from other cards to one single card and paying off the balance in EMIs for the loan on your Credit Card. This way, you are spared the hassle of repaying separate loans on different accounts. Final words Whether you need funds for a medical emergency or are planning to make a big purchase you can enjoy a bit more monetary freedom, when you apply for a loan against credit card.