- What is the Interest Rate on a Loan against your credit card?
- What are the features of a credit card loan and how can you apply for it?
Sometimes one may require funds immediately to meet their financial needs. In such times, you cannot wait for the lengthy process of application, documentation, sanction, approval and disbursal involved in different types of loans. So how to fulfill this urgent need for funds? How about a Credit Card? Don’t be surprised when we tell you that your credit card can offer you an instant personal loan. Yes, you have heard it right! You can opt for a Credit Card Loan which is fully unsecured, document-less and pre-approved. Lenders offer this type of loan to credit cardholders in two ways – It can either be within your overall credit limit or above your credit limit.
But one of the important questions that customers often ask – ‘What is the interest on a credit card loan?’ The reason behind this question is credit card loan interest rates substantially affect repayment amount and tend to change from one lender to another. That’s why customers should look at the interest rate before going for this loan facility against their credit cards. So, what is the interest rate of different lenders when you take a loan against a credit card?
In this article, we will discuss interest rates and several features of Credit Card Loans such as the Repayment Tenure, Processing Fee, Application Method, etc. If you have a credit card and are looking to get a personal loan against it, keep reading!
Credit Card Loan Interest of Different Lenders in India
As we said earlier that the interest rate is an integral aspect of a Credit Card Loan. Whenever you opt for this loan or any other loan, lenders charge a particular interest rate on the loan amount. According to this rate, your repayment amount gets affected. The higher the interest rates, the higher will be repayment amount and vice versa. Interest Rates on Loan against credit cards usually range from 11% to 20% per annum on average. Monthly Income and Credit History are two important factors that affect the credit card loan interest rate for an individual.
Before deciding the final interest rate, the lender looks at these two factors. So, an individual who has a good credit score (750 or above) and always pays credit card bills on time will get a lower interest rate on the credit card loan. Since it is an unsecured loan, interest rates may be higher than secured loans. But features like fast disbursal, convenience, no documentation make credit card loans a favorable option among customers.
Top lenders like State Bank of India (SBI), HDFC Bank, ICICI Bank, Kotak Mahindra Bank provide a personal loan against credit cards to customers. We are showing the interest rates of some of them in the below table. Please have a look.
|SBI||SBI Easy Money Scheme - 2.45% per month for 45 days ( 19.60% per annum)|
SBI Encash Scheme - Customized
|HDFC Bank||15% - 18% per annum|
|Axis Bank||11.40% - 22.20% per annum|
|Standard Chartered||Starting from 0.99% per month (11.88% per annum)|
|Kotak Mahindra Bank||Customized|
Now that you have some idea about the interest rate of different lenders, let’s talk about the features of these loans such as Tenure, Loan Amount, etc. We will be talking about the SBI Credit Card Loan first. Please check!
SBI Credit Card Loan
SBI, the largest public sector bank of India, offers two different kinds of Credit Card Loans to customers having urgent need of funds. These two schemes are Encash Plan and Easy Money Plan. Consider SBI Encash as a traditional personal loan while SBI Easy Money is more like an Instant Cash Loan to fulfill your short term needs. Customers can apply for any of these schemes via the Official SBI Website, SBI Mobile Application or SBI Helpline. We are showing the important details related to both these loan schemes below. Have a look.
If you are an existing SBI Credit Cardholder, you can get the pre-approved loan against your credit card. The important thing you need to remember is that every individual will not be eligible for an SBI Credit Card Loan. To know the eligibility, customers can contact the bank. Usually, SBI offers this loan to people with a good credit score and an excellent repayment track. Now coming to the loan amount, it can be over and above the existing credit card limit or within the limit. SBI will take the final decision regarding this. The best thing about this scheme is you get a repayment tenure of 12 to 36 months and you don’t need to submit any documents.
While opting for this loan, SBI will charge a one-time processing fee of 2% of the overall loan amount that can go as high as INR 3,000. You can also repay your loan amount before the fixed tenure by paying a foreclosure fee of 3% of the outstanding principal amount. The loan amount will be transferred to your account within a maximum of 3 working days.
SBI Easy Money
Unlike SBI Encash, SBI Easy Money is not a pre-approved loan and any SBI Credit Cardholder can opt for this. The reason: This SBI Credit Card Loan is given based on the available cash limit that changes from one customer to another. The loan amount ranges from as low as INR 5,000 to a maximum of 75% of the available cash limit. Let’s say the available cash limit on your credit card is INR 20,000. So, you can get a maximum loan amount of INR 15,000. For this loan facility, customers will need to pay a processing fee of 1.5% of the loan amount or INR 199 (whichever is higher).
HDFC Bank Credit Card Loan
HDFC Bank is one of the leading private banks of India that also provides a loan against credit cards to its cardholders at affordable interest rates. This credit card loan is a kind of pre-approved loan within the available credit limit of your particular credit card. So, if the total credit limit of your card is INR 60,000 but you have spent INR 5,000, you can get a maximum loan amount of INR 55,000. Also, remember this loan amount will be blocked against your credit limit and once you start repaying, the limit will start to increase. Customers can repay the loan amount within a tenure of 12 to 48 months. Since the loan is pre-approved, you don’t need to provide any documentation. Customers can apply for this HDFC Bank Credit Card Loan via Internet Banking and Phone Banking in an easy way.
With the HDFC Insta Jumbo Loan, customers can get the loan against their credit card too. In this scheme, the loan amount will be above the credit limit of your HDFC card. Also, it will not be blocked against the credit card limit, so, you can enjoy the original credit card limit. HDFC provides a tenure of 12 to 60 months to repay the loan amount.
Axis Bank Credit Card Loan
Credit cardholders of Axis Bank can also fulfill their immediate cash needs with the ‘Instant Loan’ facility. Like Credit Card Loan offers from other lenders, this loan from Axis Bank is also pre-approved. Existing customers can get this loan without any documentation and the loan amount will be directly disbursed to their Axis Bank’s Savings Account. The loan amount will be within your available credit limit.
Customers can choose the tenure from 12 to 48 months according to their convenience and repayment capacity. With an Instant Loan on a Credit Cards Calculator, you can know the total extra amount you will pay in the form of Interest Amount, Processing Fee, and applicable taxes on interest & processing fee. Just enter the loan amount, rate of interest, tenure and you will get the results.
Kotak Mahindra Bank Credit Card Loan
With a Credit Card loan from Kotak Mahindra Bank, customers can get a personal loan amount upto INR 5,00,000 at affordable interest rates. The bank offers this loan facility to customers who have a good credit card repayment track, excellent transaction pattern, and credit card spendings. The bank will make the final decision and the loan amount can be credited to your Kotak Bank Savings Account or any other bank account.
You can get the loan amount for as short as 6 months as long as 48 months. Customers can avail of this credit card loan from Internet Banking, Mobile Banking, SMS, or Calling to Customer Care.
Standard Chartered Bank Credit Card Loan
With interest rates starting from 0.99% per month (11.88% per annum), customers can get a loan against their Standard Chartered Credit Card. With this facility, customers can get loans upto INR 10 lakh against their available credit card limit. The final loan amount will be decided by the bank according to the past repayment track and income. Standard Chartered provides a flexible tenure of 12 to 60 months within which they will need to repay the loan amount. Customers can also choose Flexi-repayments with which there is no EMI burden and they can pay according to their convenience within a tenure.
You will need to pay a processing fee of 1% to 2% of the loan amount. If you want to prepay the loan amount before the fixed tenure, you can do it by paying pre-closure charges of 4% of the outstanding principal amount. Individuals can apply for this credit card loan via SMS, email, or Call.