Now many companies are offering credit cards in simple steps. Due to this, their use is gradually increasing. But there is also a possibility of taking loan on these in case of emergency.
Credit Card Loan: UPI transactions are currently taking place at a record level in India. Now UPI services are gradually expanding to other countries as well. Even in these conditions, the use of credit card has not decreased. Because a credit card is the easiest way to buy anything. More rewards and discounts are available. Now many companies are offering credit cards in simple steps. Due to this, their use is gradually increasing. But there is also a possibility of taking loan on these in case of emergency.
Purchases can be made with credit cards. Sometimes cash can be withdrawn from ATMs within the allowed limit. Additionally, personal loans can be availed on credit cards based on cardholder usage and credit score. As compared to personal loans, credit card loan does not require submission of additional documents.Credit card Loans are processed faster.
Banks will tell in advance
But it is important to note that credit card loans are unsecured. That means they do not need collateral security. Not all credit card holders may be eligible for these loans. Banks or card companies inform the card holders in advance about the loan amount available on their respective cards. While withdrawing cash with credit card, interest is payable from the day of withdrawal. The tenure of the loan is fixed and the interest rate is usually 16 to 18 percent. Cardholders can opt for a maximum loan tenure of 36 months.
Credit Card Loan Benefits
These loans do not affect the credit limit of the card. Even if cash is withdrawn using the card, the credit limit will not be affected. Loan approval is done on the basis of the documents submitted at the time of taking the credit card. No need to submit additional documents.
Good for emergencies only
Credit card loans should be taken only when there is an emergency. Because the interest rates on these are high. Cardholders can check loan details online including loan approval status, interest, tenure, monthly installment amount (EMI). Loan payment is done through EMI card bill. It includes interest and principal amount. Hence there is no separate due date for installment payment. Credit history and credit scores are affected if these credit card bills are not paid on time. That is why it is better to take the advice of financial experts in this regard.
