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Home Business: How to Obtain a Loan Against Your Credit Card – Complete Guide
Getting a loan against your credit card means securing a personal loan using your credit card as collateral. To be eligible for this type of loan, you must have a good credit history and a track record of responsible purchases and repayments. If you need quick access to money or are facing an emergency, taking a loan against your credit card can be a convenient and streamlined alternative to a traditional personal loan. In this article, we will discuss the process of obtaining a loan against your credit card in India, the benefits of this loan, and important considerations to keep in mind.
What is a Loan Against Your Credit Card?
A loan against your credit card involves using your credit card as collateral for a personal loan. The lender can sell your credit card to recover their losses in the event of a loan default. This type of loan typically offers lower interest rates compared to personal loans with other forms of collateral, such as payday or title loans. The reduced risk to the lender is the reason for the lower interest rates. Eligibility for a Loan Against Your Credit Card
Unsecured credit card loans usually do not require collateral deposits, making them accessible to a small number of cardholders. There are strict qualifications set by issuers that must be met to be approved for a loan against your credit card, including a commendable credit history and a history of responsible purchases and repayments.
Loan Amount
The loan amount you can obtain against your credit card depends on the credit limit of your card. Some issuers may even offer loans that exceed the credit limit, where the loan amount is not deducted from the credit limit.
Steps to Obtain a Loan Against Your Credit Card
1. Check if your credit card provider offers credit card-backed loans. This information can be found on their website or by contacting customer service.
2. Carefully read and understand all terms and conditions of the loan, including interest rates, processing fees, repayment schedules, and any other charges.
3. Ensure that the loan amount requested is within your available credit limit. If you have a considerable outstanding balance on your credit card, it may impact the loan amount available to you.
4. Apply for the loan either online or by contacting your credit card provider. You will need to provide personal information such as your name, address, and income.
5. Once your application is approved, the loan amount will be deposited into your bank account. You will be required to make monthly payments on the loan, including interest and fees.
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