Credit cards have become more than just a luxury in these modern times. The features and benefits offered by credit cards have become a part of our lifestyle. With credit cards, you do not have to worry about spending immediate cash and just swipe the credit card and the payment will be done! You will be required to pay the amount later when the bill statement is initiated every month. In emergency situations, if you require instant cash, you can also avail an instant loan on your credit card.
Instant loans on credit cards
An instant loan on a credit card is a loan that is provided to you by the lender on the issued credit card. This loan offers instant disbursal and is pre approved so that you can skip the paperwork and get immediate access to funds. Hence, it becomes a great option if you are in an emergency and require quick cash.
Unlike personal loans which usually take a long time to process and check eligibility to approve your loan application, instant loans on credit cards do not require any processing time and can be availed within a few minutes post request. The loan amount is usually the credit limit of your credit card. However, you can also choose the option of top up and increase the loan amount if you are eligible and your lender provides you with such an option.
Features of instant loans on credit cards
- The loan offers quick disbursal, hence, funds are accessible within a few hours post the request.
- There are no additional documents required for an instant loan. It is pre approved due to the credit card.
- The loan can be repaid through EMIs with a typical repayment tenure of 6 to 48 months.
- These loans are unsecured and do not require any collateral.
- Instant loans on credit cards have lower interest rates as compared to the normal credit card interest charges on bill repayment, although they are slightly higher than personal loans.
Should you get an instant loan on a credit card?
Although instant loans on credit cards provide you with instant access to funds. However, it is advisable that you take such a loan only if you are in a financial constraint like a medical emergency or unavoidable travel expense. These loans are a decent way to manage high interest debts and consolidate your other EMIs. This way you can manage your debts in a better way and pay them off faster.
However, if you are looking for larger amounts or are planning for a long term aid, these loans might not be the best option for you as they attract a hefty interest rate which are even higher than personal loans. Hence, you should consider them only for a short term aid and only if you are sure that you will be able to repay it in time without any extra burden.
In conclusion, it is extremely important that you first understand your needs and evaluate your financial budget before you take any such loan. If you are in a need of funds and can wait for a little while, you must explore other credit options available in the market and compare them so that you can get the best deal which suits your budget. This way you can avoid any unnecessary financial debts.
(Note: Using a credit card carries its own set of risks)
