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Things You Must Know Before Planning to Take a Loan Against Your Credit Card

Aryan Sharma

Nowadays, taking a Loan against a credit card has become more popular when planning a flexible way for a personal loan. If you use a credit card, then you can apply for a loan against your card easily. 

It is a good decision to check some must-to-know things before you plan to take a loan against a credit card. So, we have brought to you some essential pointers that you should check before delving deep into the plan. So, let’s have a look.

Top Banks providing Loans against Credit Card:

Many reputed banks in India allow their customers to sanction a credit card loan.

Given that, when you apply for a loan against a credit card, low interest is charged on your loan, then cash withdrawals on credit cards. So, this kind of loan sounds economically viable. This is why many people opt for loans against credit cards. This kind of loan is sometimes also referred to as pre-approved loans and is also known as a pre-qualified loan.

Eligibility for Loan against Credit Card:

You will be eligible to get a credit card loan only if you fulfill the following conditions:

Generally, banks offer loans against credit cards for both their existing and new customers. However, there are some banks that offer it only for existing credit cardholders.

You must have a credit card account to get this loan.

Also, having a good credit history, like having a nice amount of credit card reward points, is another essential criterion in this case. Therefore, banks offer this loan only if you hold an excellent record of credit repayment and also have a high credit standing, if possible, with a large amount of credit card reward points.

A person with a high-income level can also apply for this loan against a credit card. The improved income level will help you transfer the credit card from the silver category to the gold category. This further increases your loan eligibility, and this also helps you gain more credit card reward points.

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However, before you go applying for a credit card loan, you should also check your eligibility by using the means – phone banking, net banking, and visiting your nearest branch.

Documentation required:

No documentation is required when you apply for this kind of loan. Because, when you are planning for a loan against a credit card, the thing that is a must to have you is a credit card. So, at first, you need to apply for a credit card and submit all the required documents to your bank. Then, based on those submitted documents, they will verify them. Then, they check for the relationship that you have built with your bank and verify your reliability in the future. Then, after executing the whole process, the bank can sanction you a loan against the credit card.

Generally, your bank will ask you for the following documents when you are applying for a credit card:

  • One copy of your address proofs. This might have your recent electricity bill, driving license, telephone bill, passport, etc.
  • One proof of your identity. This might have your voter ID card, adhar card, PAN card, driving license, passport, etc.
  • A few recent photographs, preferably of passport size.
  • For the salaried employees, they will also ask for the last three months’ salary slips and one copy of the office ID card.
  • In the case of self-employed individuals, submission of another document like an attested copy of the latest Income Tax Return, and also, they will be asked to submit one copy of their PAN card.

How to apply for a personal loan against a credit card:

You can apply for a personal credit card loan online. You have to visit the official website of the lender whom you have selected as your lender of the loan and from whom you want to avail of this facility.

Then, you will need to fill the application form and submit it along with all the necessary documents they will ask you for. Then, the bank will thoroughly verify the documents you have submitted to them. After the checking procedure, if they are found to be all okay, the bank will approach the steps towards disbursement of the amount of your loan to your account.

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You can apply for a loan via a credit card offline. In this case, you need to visit the nearest branch of your preferred bank from where you want to avail of this loan facility. Before visiting the Bank branch, you have to make sure that you carry all the required documents of the procedure along with you. After you reach the Bank branch, a bank representative from the branch will connect to you, and that person will help you with the further procedure of applying for a loan against a credit card.

Unlike other personal loans, this kind of loan, taken against a credit card, does not ask you for documentation and follows a very easy way. A personal loan generally needs a few documents as a witness of your eligibility. But, when you take a credit card loan, it is like an unsecured loan, more likely the same-day cash loan. Also, applying for a personal loan against your credit card follows an easy and simple process. So, go for it and make an excellent choice for your life.

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