Credit cards are usually viewed as a payment mode for most users, right? Whether it’s shopping or other transactions, using credit cards for payment is a common thing. But what many are not aware about is another use of them. It’s the loans against credit cards.

In life, the need for loans to overcome financial deficits is a certainty in a world where medical or other financial exigencies arrive anytime, and many individuals are laid off, have their incomes cut, or face other forms of economic insecurity. So it’s important for those who already have credit cards to assess the pros and cons of pre-approved digital loans like a loan against credit card before applying or accepting the offer for it.

So if you have a credit card and wondering if you should take this loan, here are some prons as well as cons to help you get clarity.

Super quick processing and fund disbursal

Loans against indusind legend credit card are likely to have the quickest processing and funding times of any other type of credit facility. Due to the pre-approval process, current credit cards that are eligible for this loan will require no paperwork in order to get release of their funds within a few hours of submitting an application. In addition, several credit card companies boast instantaneous or near-instantaneous money availability. Those who meet the criteria for the loan need only submit an application via online banking or contact the credit card issuer’s customer service support staff. The loan amount can either be deposited directly into your account or sent to you via demand draught, at your convenience.

Compared to other forms of available funding, it’s a strong contender. The continued lockdown and limitations caused by the pandemic, along with the limited working personnel and hours for lenders, and the economic uncertainties, make indusind legend credit card loans an especially beneficial source of financing. Credit card loans have a number of benefits, including speedy funding, preapproval, and the convenience of applying for a loan online or via phone banking. Existing credit card customers who are unable or do not qualify for alternative lending choices may be able to apply for a credit card loan through a credit card issuer in the event of a financial shortage, liquidity mismatch, or debt consolidation. Compare interest rates, loan terms, processing fees, and the total amount you can borrow from each potential lender before making a final decision.

Tenure upto 5 years

Funds may be borrowed for a period of time between one and five years. Borrowers can select a loan period from a range of 6 months to 5 years in order to find a repayment term with an EMI that is manageable for them. Keep in mind that while a longer loan period will result in cheaper monthly payments, it will also result in a higher overall interest expenditure. Therefore, it is prudent to select a loan term that is consistent with your ability to make monthly payments. If you fail to pay your credit card bill in full and on time, you may incur significant financial costs in the form of high interest rates on your credit card balance and a late payment fee, which will be added to your loan EMI.


High interest cost

The interest rate you pay on a credit card loan is based on a variety of factors, including your credit score, the type of card you have, your repayment history, your employer, and your employment profile, among others. Your indusind legend credit card loan interest rate is likely to be at least 1% more than the interest rate you could get on a personal loan if you had a similar credit history, but amid uncertain economic conditions like the current one, credit card issuers may demand considerably higher interest rates. As a result, people who already have more than one credit card should shop around for the best interest rate possible, considering their current credit cards as well as alternative loan possibilities including digital top-up home loans, fast personal loans, and COVID 19-specific personal loans.

Loan amount dependent on credit limit 

The credit card issuer sets a maximum loan amount that can be borrowed against a credit card, and when a loan is taken out against a credit card, the cardholder’s credit limit is temporarily frozen up to the loan amount.

The loan cap, however, will be gradually unlocked as you make timely EMI payments. Further, certain credit card issuers may grant this loan in excess of your available credit limit on the card, thereby preserving your credit limit and allowing you to continue making your usual credit card transactions. It’s important to remember, though, that a credit card company wouldn’t do this unless they carefully considered your financial situation, including your ability and history to make payments on time.

Unless otherwise stated, your credit limit will determine the maximum amount of money you can withdraw from an ATM using your credit card. When a loan is taken out against a credit card, the credit card issuer may or may not freeze all of the available cash withdrawals. Making ATM withdrawals with an indusind credit card incurs both cash withdrawal fees and super high credit card interest rates, so doing so should be avoided to the greatest extent possible. However, having that option available may be helpful in dealing with financial difficulties.

Final words

In times of economic uncertainty, reduced working hours, and a shortage of accessible personnel for lenders, as as the present pandemic, credit cards can be one of the most favourable credit sources due to their many benefits and characteristics. It is prudent to explore alternative lending options, such as digital quick personal loans, and digital top-up home loans, before committing to a riskier option. These loans can be dispersed in the same period of time as credit card loans, and they may even have cheaper interest rates than applicable indusind legend credit card interest rates.