Credit Cards Help and Advice

How To Avail A Cash Loan With Your Credit Card

Review of the Citibank Cash Back Card
Viveka Rao
Written by Viveka Rao

You Can Avail A Personal Loan Using Your Credit Card, But It Won’t Be Cheap Improving India's Credit EverydayPersonal loan on your credit card is a pre-approved, unsecured loan. You can get this personal loan instantly. This loan comes to rescue when you do not have any security as collateral. The only distinction between a loan on your credit card and personal loan is that it takes a few days to get the personal loan approved. However, the loan on credit card is approved beforehand. This kind of loan is used to procure money in urgent needs of finances.

The loan can be availed over the credit limit of your credit card or on a particular percentage of the unused credit card limit. In case you have made pricey purchases with the credit card, it is easy to repay for such purchases in installments with the loan. This excludes gold or other jewelry from the purchases. Credit card loans are very convenient options if you want to obtain small amount since you do not have to submit any documents.

The confusion 

People often get confused about the cash withdrawals and credit card loan. They often think that the bank is going to increase their credit limit for the credit card and you can use your credit card to withdraw cash. However, this is not true. You cannot withdraw cash in the name of credit card loan. On the contrary, cash withdrawals from your credit card impose higher interest rate. The rate of interest is lower for credit card loan.

You receive the amount of loan as a demand draft or it is transferred to your bank account. Therefore, it is a better option in terms of affordability.

What are the documents needed for loan against credit card?

You do not need any documents to apply for loan against credit card since you have already submitted the documents for your credit card. Depending upon the documents, you have submitted beforehand and the kind of rapport you have with the bank, your loan can be instantly approved. When you file an application for a new credit card, you are asked the following documents:

A photocopy of address proof like telephone bill/ electricity bill/ passport/ driving license etc

An identity proof like voter ID card/ PAN card/ passport/ driving license, etc

Your up-to-date passport sized picture

Salary slip for the last three months if you are in a job

A photocopy of your ID card from office

If you are self-employed, you are required to present an attested photocopy of recent income tax returns (ITR) and a photocopy of your PAN card.

Rate of interest for loan against credit card

Rate of interest of loan against credit card is slightly higher. Depending upon the policies of different banks, it may range between 15%- 21%. In addition, the interest rate may vary upon the kind of credit card you have- platinum, gold, or silver and your credit profile. That is why; it is crucial to maintain a decent credit profile since the banks always check your credit history prior to quoting a rate of interest for your loan.

You can apply for loan against credit card through online banking/ phone banking or taking a visit to your bank branch.

Benefits of using credit card loan

You can have instant cash wherever and whenever you require

The rate of interest for loan against credit card is lower than cash withdrawals

You do not need to submit any documents again

The process of application is simple

The processing of loan is quick and loan is disbursed quickly.

The processing fee for the loan is very low

It is easy to pay the loan in installments. Your EMIs will be reflected in your monthly bills.

The maximum tenure for the loan is 24 months.


Getting a loan from your credit card is not the best or cheapest option when you need cash, but it’s important to remember it is an option. Have your payback plan in place so you won’t have to worry too much about interest and you’ll be just fine. In other words, be credit smart!

About the author

Viveka Rao

Viveka Rao

Viveka Rao is post grad in finance and a freelance writer here at CreditSmart. A love for shopping and travel rewards has fueled her interest in personal credit, and making the most of rewards programs. She writes to educate other consumers in making great financial choices.

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