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How to Get a Loan Against Your Credit Card?

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Created on
September 27, 2022


What’s Inside

Getting a loan on your credit card can be a convenient and hassle-free option to fulfil your financial needs. Credit card loans provide quick access to cash. It has a more straightforward application process and eligibility criteria than personal loans. In this blog, we will delve into the concept of a loan on a credit card, how it works, its features, and the process of getting the loan.

What is Loan on a Credit Card?

When you apply for a credit card, the bank assigns you a specific credit limit. You can use this credit limit in two ways:

  1. Use the card to make payments up to the specified credit limit
  2. Use your available credit limit to get a lump sum amount as a loan in cash

If you go with the latter & the bank approves your request for a loan against your credit card — the amount you opted for will instantly reach your Savings Account.

You can repay this loan through Equated Monthly Instalments (EMIs) over a specified tenure. The interest rate for loans on a credit card may vary depending on the bank and other factors such as your credit score and income level.

Note: The bank will temporarily block your credit limit by the amount of loan that you’ve opted for. However, it will gradually release the block on your credit limit with each EMI payment you make.

How Does Loan on a Credit Card Work?

Here's an example to help you understand this concept better.

Let's assume you have a credit card with a total credit limit of ₹2 lakh and you wish to avail a loan worth ₹1.5 lakh (for 12 months) against your credit card. Say that the bank charges an interest rate on a loan at 15% per annum.

Once the loan request you place with the bank is approved, you will receive the funds in your Savings Account. Simultaneously, your available credit limit will reduce to ₹50,000 from ₹2 lakh.

You will have to pay an EMI of ₹14,375 for 12 months to repay this loan. With every EMI payment of ₹14,375 that you make, the bank will gradually release the blocked credit limit by a certain amount. At the end of the 12th month, you will get your credit limit of ₹2 lakh back.

Loan on a Credit Card Features

Now that you've got a fair grasp of how loans on a credit card work, let's look at a few of its features.

It's Pre-approved

Loans against a credit card are pre-approved — by the bank that issues the card. It means no-more lengthy applications to submit and long-waiting periods for the bank's approval. It cuts down the time it takes to process the loan significantly.

Funds Instantly Disbursed

Since a loan on a credit card is pre-approved, the funds reach your account (linked to the credit card) almost instantly. But, if you haven't linked a bank account, receiving the funds might take up to 24 hours or more — which is still much faster than a traditional loan.

No Documentation Needed

You won't have to submit any documentation to avail a loan on a credit card. All you need to do is apply.

Eligibility Criteria for Availing Loans on a Credit Card

These criteria will vary depending on the bank that issues your credit card. However, here’s a set of basic norms you must meet.

  • You must possess a valid and active credit card
  • Your credit card must not have unpaid outstanding dues
  • You need to maintain a long credit history and a high credit score
  • You must be an existing customer of the bank
  • You must have a stable and high source of income

How to Get a Loan Against Your Credit Card?

Getting a loan against a credit card is very easy and it doesn't take much time.


Most banks allow you to quickly apply for a loan against your credit card. Start by logging into your credit card account. After logging in, apply for the loan by entering the amount and the tenure. You may need to authenticate the request via an OTP sent to your registered mobile number. Once you place and authenticate the request, the funds will be disbursed to you instantly.


Alternatively, you can call your credit card provider's customer care helpline and apply for a credit card loan. The customer care representative should be able to telephonically guide you through the process. You can also visit your nearest bank branch.


A loan on a credit card offers a convenient way to access funds quickly, with minimal documentation and pre-approval from the bank. It provides flexibility in repaying the loan through EMIs over a specified tenure.

By understanding the features, working mechanisms, and eligibility criteria of credit card loans, you can leverage this unique feature to meet your financial requirements. Whether online or offline, the application process is straightforward, ensuring a seamless experience for users.

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Frequently Asked Questions

1. Is it a good idea to take out a loan on a credit card?

A loan on a credit card can be a good option for short-term borrowing or emergency cash. But this typically carries higher interest rates than traditional personal loans, so it's essential to carefully consider the terms and assess your ability to repay before opting for it.

2. What is the interest rate of a credit card loan?

The rate of interest on a personal loan on a credit card may vary depending on the card issuing bank. It's based on multiple factors like your income level, credit score, repayment history, and your relationship with the bank.

3. Do credit card loans affect your credit score?

Yes, credit card loans can affect your credit score. The way this happens depends on how you manage your credit card account. If you make your payments on time and keep your credit utilisation low, your credit score will likely improve. However, if you miss payments or have a high credit utilisation, your credit score may be negatively affected.

5. How to get a loan on a credit card?

You can get a loan on a credit card online or offline.

Online: Log into your credit card account & apply. Enter OTP. That's it.

Offline: Call your credit card provider's customer care helpline & apply. Or visit the nearest bank branch.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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