Credit cards have become more than just a luxury in these modern times. The features and benefits of credit cards have become part of our lifestyle. With credit cards, you don’t have to worry about spending cash right away. Just swipe the credit card and the payment is complete! You pay the amount later when preparing the monthly account statement. If you need immediate cash in emergency situations, you can also take advantage of an instant loan on your credit card.
Instant loans on credit cards
An instant loan on credit card is a loan provided to you by the lender on the issued credit card. This loan offers immediate payout and is pre-approved, so you can skip the paperwork and get access to the money right away. Therefore, it becomes a good option if you are in an emergency and need quick cash.
Unlike personal loans, which typically take a long time to process and verify your loan application’s eligibility, instant credit card loans require no processing time and can be used within a few minutes of applying. The loan amount is usually the credit limit of your credit card. However, you can also opt for the option of top-up and increase the loan amount if you are eligible and your lender offers you such an option.
Features of instant loans on credit cards
- The loan offers a quick disbursement, making the money available within a few hours of the request.
- No additional documents are required for a direct loan. It is pre-approved because of the credit card.
- The loan can be repaid through EMIs with a typical repayment period of 6 to 48 months.
- These loans are unsecured and require no collateral.
- Direct loans on credit cards have lower interest rates compared to normal credit card interest rates on bill repayment, although they are slightly higher than personal loans.
Should you get an immediate loan on a credit card?
Although instant loans on credit cards provide you with instant access to funds. However, it is advisable that you only take out such a loan if you are experiencing financial difficulties, such as a medical emergency or unavoidable travel expenses. These loans are a good way to manage high interest debt and consolidate your other EMIs. This way you can manage your debts better and pay them off faster.
However, if you are looking for larger amounts or planning to get long-term help, these loans may not be the best option for you as they come with high interest rates that are even higher than personal loans. You should therefore only consider them as short-term assistance and only if you are sure that you can repay them on time, without additional costs.
In conclusion, it is extremely important that you first understand your needs and evaluate your financial budget before taking out such a loan. If you need money and can wait a while, you should explore and compare other credit options available on the market so that you can get the best deal that suits your budget. This way you avoid unnecessary financial debts.
(Note: Using a credit card comes with its own risks)
