Yes, you can take out a loan on your credit card. This is a kind of personal loan. If you are using a credit card then you can apply for an instant loan against your card. When you apply for a personal loan generally then you will be required to produce related documents in support of your eligibility. However, when you apply for a loan on your credit card, you don't have to provide any additional documentation.
Opting for a loan against a credit card is like opting for an unsecured loan. Often we confuse between loans against credit cards and cash withdrawals on credit cards. By lending against credit cards, we tend to think that banks will increase the credit limit on credit cards and one can withdraw cash through credit cards. But, it's a misconception. Most banks usually provide loans against existing credit cards. Those who need immediate cash can choose for a loan against a credit card.
If your credit card limit is not enough to suffice your cash requirement then loan can be opted. Besides when you withdraw cash from your Credit Card then the rate of interest charged on it is higher. But when you opt for a loan the rate of interest on loan is comparatively lower. Also, the loan is disbursed quickly with no documentation. Given that low interest is charged on loans against credit cards rather than cash withdrawals on credit cards, a loan against your credit card sounds economically viable.
Here are some popular banks which offer loan against credit cards:
- State Bank of India
- HDFC Bank
- ICICI Bank
- Bajaj FinServ
- HSBC Bank