Different banks provide loans on credit cards to their customers. However, the interest rate varies for all customers. A loan on a credit card is similar to taking a personal loan from a bank.
Nowadays most people use credit cards. It is a thing of your work when needed, but it should be used carefully. If you have spent an unlimited amount on credit card and have not paid in time, then you will have to pay a heavy fine. If you spend control on credit card, then it also gives you the facility of loan. Loan on credit card is nothing. In this article, we will try to understand those aspects and specifics, when you take advantage of the personal loan offered by credit card.
Different banks provide loans on credit cards to their customers. However, the interest rate varies for all customers. A loan on a credit card is similar to taking a personal loan from a bank. The rate of interest is fixed in this. Depending on the limit of your card, the bank gives you the facility of pre-approved loan. One condition regarding this is that loan cannot be offered to you more than the credit card limit and the interest rate on the loan is less than the interest rate of the credit card. Generally the interest rate for a credit card is 35-40 per cent per annum.
Budget 2021: FD in the same bank where the pension is; If so, a big discount for senior citizens
Avoid late payment
A loan on a credit card is an secured loan. Therefore it is very much dependent on your financial health. In such a situation, if you want to take a fresh loan on a credit card or get it top-up, then it is important to keep some things in mind. If you make a late payment to a credit card, the chances of a top-up loan will be less. In this case, you will get an advantage on paying the bill every month and the bank will also offer a lower interest rate. Experts advise that you should pay on credit card in time. This keeps your civil score correct.
More loss by default
If you do not pay the EMI of the loan taken on credit card in time then it will be considered as default. Default in credit card payment and default in payment in loan are two different situations. By default in loan EMI, the credit score of the card holder has a worse effect. Therefore, repay EMI of the loan on time.
Pre-closure facility
The processing fee for a credit card loan is 1-5 per cent. How long will the loan holder choose the card holder. By the way, this maximum is 24 months in the ordinary case. It also has the facility of pre-closure. There is no loss in this, although you have to pay the pre-closure charge.
