Why Apply For Loan Against Credit Cards?

Economic conditions make it harder for funding expenses. Monthly earnings are usually insufficient to meet additional requirements. This is where banks offer Credit Cards as a convenient tool. It lets you borrow finances to meet immediate needs and pay later. While this is helpful, it is unsuitable for making large purchases. If you overspend, you may consume your credit limit and incur a penalty. So, what to do when you need a considerable amount?

In such cases, you can apply for a Credit Card Loan. Most people confuse them with increasing the credit limit on the card. But it is not. Banks provide a Loan against your existing Credit Card for emergencies. It could be called a type of Personal Loan that is easy to avail of and offers funds when you need them than a lumpsum amount. If you need emergency financing, here are other reasons to consider them:

No collateral needed

It is an Unsecured Loan. Hence, you need not submit collateral or security. This makes it easier to avail of credit without blocking your existing assets. Moreover, you may get pre-approval from your current bank. This saves the hassle of applying with multiple lenders and waiting for approval.

Quick disbursal

Banks check your KYC details when you get a Credit Card from them. They use this when you get other services. Hence, you need not go through the documentation process to get the Loan against Credit Card. This makes the Loan disbursal quicker. Usually, the amount gets sanctioned within hours of application. Other times, the most convenient mode is applying online for immediate response.

Unrestricted end-use

This Loan gets categorised as a Personal Loan. Hence, it shares similar characteristics. As a result, banks do not enquire about the requests. You can buy high-value merchandise, and customer goods, or use them for financial emergencies. Lenders only focus on getting timely repayments.

EMI facility

Like other Loans, this credit facility also facilitates flexible repayments via equated monthly instalments. The amount gets added to your Credit Card bill. This enables you to clear the bill and repay EMIs simultaneously. You can stretch the tenure for up to 60 months.

Boosts credit score

Availing of any Loan only builds a healthy credit score if you make timely repayments. But the speciality of Credit Card Loan is their flexibility. As aware, you can stretch the tenure that suits your needs.