{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/credit-card\/what-is-a-loan-on-credit-card\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/credit-card\/what-is-a-loan-on-credit-card\/","headline":"What is a Loan on a Credit Card?","name":"What is a Loan on a Credit Card?","description":"Have you ever been curious about what a loan on a credit card is and how it functions? A loan on a credit card is a financial option that allows you to borrow funds against your credit limit. This kind of loan can act as a lifesaver during financial exigencies or for planned expenses, providing...","datePublished":"2024-09-04","dateModified":"2024-09-04","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/indusind\/#Person","name":"IndusInd Bank","url":"https:\/\/www.indusind.com\/iblogs\/author\/indusind\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/8169561f34fb61e737060f1a537a86e2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/8169561f34fb61e737060f1a537a86e2?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/loan-on-credit-card-min.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/loan-on-credit-card-min.jpg","height":288,"width":764},"url":"https:\/\/www.indusind.com\/iblogs\/credit-card\/what-is-a-loan-on-credit-card\/","about":["Credit Card"],"wordCount":1603,"articleBody":"Have you ever been curious about what a loan on a credit card is and how it functions? A loan on a credit card is a financial option that allows you to borrow funds against your credit limit. This kind of loan can act as a lifesaver during financial exigencies or for planned expenses, providing you with instant funds without the requirement for additional documentation or approvals. The borrowed amount needs to be repaid in fixed monthly instalments as per your repayment potential over a specified period. If you need funds exceeding your existing card limit, don\u2019t worry. Having a good credit score increases your chances of securing loan proceeds over and above your existing limit. Also, a good score makes you eligible for a loan at lower interest rates. Read on to understand the distinct kinds of credit card loans available in the market, and which card you should choose to avail this facility. Types of Credit Card Loans Available1)\u00a0Pre-Approved LoansUsually, pre-approved loans are sanctioned against the card user\u2019s credit card limit. When you avail a pre-approved loan, your credit card limit is temporarily blocked up to the extent of the loan proceeds sanctioned. As you repay the loan Equated Monthly Instalment (EMI), your credit limit is gradually restored. As mentioned above, a few credit card issuers may offer a variant of this loan, allowing you to borrow proceeds over and above your credit limit if you hold a good credit score. This flexibility can be helpful when you need additional funds beyond your available credit. 2)\u00a0No-Cost EMI LoansCredit card issuers may offer a no-cost EMI facility on purchases of goods and services. Using this facility, you can convert your huge transactions into easy monthly instalments without bearing the interest constituent. This can be an excellent way to manage your finances and make big-ticket purchases more affordable. The overall cost of the product or service purchased is divided into equal EMIs, making it affordable. Note that no-cost EMI loans are best for purchasing electronics, appliances, or even travel packages, enabling you to enjoy your purchase without the stress of a lump sum payment.3)\u00a0Regular Loan EMIs with InterestThese are standard loans where you borrow a specific amount against your credit card for the purchase of a good or service, which you must repay with interest over a period. The interest rates for such loans can differ depending on the card used and your creditworthiness. While such loans on credit cards offer a straightforward way to access quick funds, it is essential to compare interest rates and terms to figure out the best deal. Also Read: The Role of Credit Cards in Personal FinanceBenefits of Availing a Loan against a Credit CardAvailing a loan through your credit card can endow various benefits, particularly in urgent scenarios. Here\u2019s how it can be beneficial:1. Instant Access to FundsUnlike traditional loans that need days or even weeks for approval, loans against credit cards can be accessed instantly. Many banks offer pre-approved loans to specific customers who have demonstrated disciplined credit behaviour and maintain an excellent credit score, making them eligible for such deals. This eliminates the requirement for lengthy application processes, allowing you to get funds quickly. 2. Minimal DocumentationAs the financial institution already has your details, the documentation required is minimal. This saves time and helps you focus on resolving your instant needs without hassle. 3. Loans Based on Your Credit UsageDisciplined use of your credit card can result in higher credit limits. This, in turn, can make you eligible for a bigger loan amount when you need it. It is essentially a reward for maintaining good financial habits. 4. Flexible Repayment OptionsLoans against credit cards come with the option to repay in EMIs. You can select a repayment term that matches your financial scenario, making it simpler to manage your payments comfortably. 5. Lower Interest RatesThe interest rate on a loan against a credit card is lower than that for regular credit card withdrawals. This can save you a considerable amount in interest charges over time. 6. No Security RequiredUnlike other loan types, you do not need to offer your house or car as collateral when borrowing against a credit card. The loan is based on your credibility and existing credit limit, making it a more accessible option than conventional loans. Credit Card Benefits beyond LoansIn addition to the benefit of availing pre-approved loans, credit cards come with a range of other benefits. From cashback and reward points to fuel surcharge waivers and airport lounge access, having the right credit card can support your routine spending. For instance, the IndusInd Bank Nexxt Credit Card offers the convenience of PoS shopping at over 10 lakh domestic merchant outlets, enabling you to buy products of your choice at EMI options with just the click of a button.The card also offers EMI facilities for online transactions, providing high financial flexibility. Besides these financial benefits, the card also offers a range of other perks, including:Reward pointsEarn 1 reward point for every \u20b9150 spentFuel surcharge waiver1% waiver on fuel surchargeThe IndusInd Bank Nexxt Credit Card is also an excellent choice for availing pre-approved loans for customers who meet the bank\u2019s criteria. Ending NoteA credit card loan offers a convenient way to access funds instantly without the stress of a conventional loan application process. With options like pre-approved loans, no-cost EMIs, and regular EMIs, the process to avail funds becomes even simpler. You know what\u2019s better? Using a credit card that offers you the benefit of these loan facilities, and also a better reward program and additional perks.Here\u2019s where the IndusInd Bank Nexxt Credit Card comes in. This unique financial instrument allows you to avail these loans while offering enticing benefits such as reward points, fuel surcharge waivers, and flexible EMI payment options.So, do not delay any further; apply for an IndusInd Bank Nexxt Credit Card and leverage its holistic EMI facilities along with its rewarding features and benefits.  Apply now!Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.  Share This:"}