The use of credit cards is rising due to various uses like an alternative to cash, reward points, cashbacks, joining bonus etc. A credit card has a universal acceptance and can be used anywhere across the globe. Amongst various uses, one of the best features of a credit card is the pre-approved loans. A Axis Bank Credit Card offers pre-approved loans to cardholders within or over the limit. Based on your credit limit and repayment capacity, card issuer determines your credit card loan amount. Like other loans, it is repaid in the form of monthly EMIs along with interest.
Features of Credit Card Loan
The credit card loan scheme differs across banks. But some of the common features of the loan scheme is as follows:
- Credit card loans involve minimum documentation and are approved and disbursed quickly as these are pre-approved loans.
- Credit card loans allow converting the expensive purchases into easy monthly affordable EMIs.
- There is an option to take a loan against other bank’s credit card through a balance transfer. Few banks allow you to balance transfer your outstanding balance to another bank’s credit card and repay through EMIs.
- In some cases where customer’s past loan history is good, credit card issuers allow credit card loan over the credit limit.
Usually, the credit card loans are unsecured and can be availed without any collateral. An unsecured loan implies lenders face higher risk in advancing credit card loans. Hence, eligibility criteria are strict and the loan is advanced only to select customers. for availing a credit card loan your CIBIL score should be very good with a good repayment track.
Personal Loan v/s Credit Card Loan
Apart from credit card loan when in need you can apply for a personal loan. A personal loan is also an unsecured loan, available at the affordable interest rate. Whenever you need a loan of a bigger amount, you can apply for a personal loan. This is because credit card loans are available for select users only and the loan amount depends upon the credit limit. You may not get the desired amount as loan. Also, you will not be able to utilize the full credit limit sanctioned till the time you repay your loan. Hence, taking a personal loan in this situation is better.
However, if you require a loan of a smaller amount and only for a shorter-tenure of few months credit card loan is a better choice. Before deciding between the personal loan and credit card loan, you should figure out the amount of loan you actually need, your repayment capacity etc. Along with it do a comparative analysis of interest rate and repayment conditions etc.
If you haven’t been using any credit card till now, it is advised that you should apply for one. As, in case of emergency, you can avail a credit card . Additionally, you will have an option to choose between different loans available. You can apply for a credit card offline as well as offline. For hassle-free approval, applying online is a better option. You can apply for a credit card through an online aggregator.