What are credit card loans and who is eligible? Know details

Kolkata: Credit cards are becoming a tool for transaction for a large number of people in this country. They use it for buying a meal at restaurants to purchasing airline tickets, paying for consumer items to grocery and utility bills. But how many are aware that the credit card is also a tool for getting an instant loan?

Loans on credit cards are pre-approved loans extended to you based on your credit card usage, repayment and history, according to HDFC Bank, the biggest private sector bank in this country and the biggest issuer of credit cards.

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Loans on credit cards come pre-approved. More important, they can be offered without any collateral asset and in fact without any documentation. What it means is that the credit history of the individual in question is so trustworthy that banks offer such loans on the basis of that usage and repayment patterns. It means, the owner of every credit card is not eligible for a loan on the credit card.

HDFC Bank states that their customers can check online whether they are eligible for such a loan. All they need to do is to log into the netbanking service of HDFC Bank and check it under the credit card tab. One can also check over the phone.

The loan that is issued against your credit card is usually within your credit card spending limit. There are some situations when a loan can even be sanctioned even beyond the Also the repayment tenure of these loans is usually between 12 months and 60 months.

These loans are disbursed very quickly since they come pre-approved. The lending institution has already gone past the stage of assessing your creditworthiness. Disbursement can take place as close to what you understand by instantly.

Also the EMIs on these loans are usually added to the credit card statement. One has to repay them on the due date besides the due amount to the card for any purchase that one has made. A significant point to remember is that Your credit limit will be reduced to the extent of your EMI amount. Another point is that there are no strings attached to these loans -- the borrower can spend the money on anything he/she wants.