Step-by-step guide on how to get a Loan on Credit Card

A Credit Card allows you to make purchases now and pay later, typically within a month or 45 days. However, if you need more time to settle your payment, a Loan against a Credit Card can be a perfect solution. It lets you repay the amount in manageable monthly instalments rather than in a lump sum on the due date.

So, how do you obtain a Loan against a Credit Card? Let's discuss.

A Loan against a Credit Card is a pre-approved loan that doesn't require any documentation. The process is straightforward, and the funds are disbursed instantly into your account.

For instance, if you are an HDFC Bank account holder, you can check your eligibility for a Loan against your Credit Card by logging into your NetBanking account. If eligible, you can apply for the loan immediately and receive the funds within seconds. You can apply for a Loan on a Credit Card only if your card is registered for NetBanking

To register your card, log into NetBanking and follow these steps:

• Step 1: Click on the cards tab
• Step 2: Select Transact on the left menu
• Step 3: Select Register a new card
• Step 4: Fill in the details and press submit.

To check if you are eligible for a loan on a registered card, here’s a detailed step-by-step guide:

• Step 1: Login to your NetBanking account
• Step 2: In your NetBanking account, click on cards.
• Step 3: On the left menu, click on Transact.
• Step 4: HDFC Bank offers three types of loans on a Credit Card – Insta Loan (a loan within your Credit Card limit) and Insta Jumbo Loan (a loan beyond

HDFC Bank offers three types of loans on a Credit Card – Insta Loan (a loan within your Credit Card limit), Insta Jumbo Loan (a loan beyond your Credit Card limit), and SmartEMI (convert purchases into EMI loans).

Steps for Applying for Insta Loan or Insta Jumbo Loan

• Step 1: Select the Credit Card you wish to use for the loan application.
• Step 2: If you are not pre-approved for a loan, you will receive a message informing you of this.
• Step 3: If your card is pre-approved, an application form will open, displaying the maximum loan amount you are eligible for.
• Step 4: Enter the desired loan amount, tenure, and interest rate. Choose your savings account, accept the terms and conditions, and click 'Continue'.
• Step 5: Review the loan details provided and press 'Confirm' to proceed.
• Step 6: Select your preferred method of receiving the OTP (email or SMS) and click 'Continue'.
• Step 7: Input the OTP received and click 'Continue'.
• Step 8: You will receive an acknowledgement with a reference and loan account numbers.
• Step 9: The loan amount will be credited to your account instantly.

Steps for Applying for SmartEMI

• Step 1: Choose the Credit Card you wish to use for the SmartEMI application.
• Step 2: Under the transaction type, select 'Debit' and click 'View'.
• Step 3: You will see a list of transactions. Transactions eligible for EMI will display a message saying, ‘Click to know your eligibility’.
• Step 4: Click on the message next to the transaction you want to convert to EMI.
• Step 5: The loan amount you are eligible for will be displayed. Enter the amount you need.
• Step 6: Choose the desired tenure and interest rate for the EMI.
• Step 7: Read and accept the terms and conditions.
• Step 8: Click ‘Continue’ to proceed.
• Step 9: Verify the loan details provided and click ‘Confirm’ to complete the application.
• Step 10: You will receive an acknowledgement with a reference and loan numbers.

Processing Fee

When applying for a Loan against a Credit Card, be aware of the processing fees involved. For an Insta Loan and Jumbo Loan, the fee is a flat ₹500. The fee for a Smart EMI Loan is 1% of the loan amount. This fee is charged upfront and is separate from the loan principal and interest.

No Documentation

One of the benefits of a Loan against a Credit Card is the absence of documentation. You don’t need to submit any paperwork or proof of income, making the process quicker and simpler compared to traditional loans.

Instant Disbursal

Once approved, the borrowing amount is disbursed instantly into your account. If preferred, you can also request the funds to be issued as a demand draft, which can be useful for large transactions or if you need physical cash.

EMI Billing

The loan repayment is managed through EMIs, billed as part of your regular Credit Card statement. Paying these EMIs by their due dates is crucial to avoid penalties or impact on your credit score.

Credit Limit Impact

When you take a loan against your Credit Card, your credit or spending limit is typically reduced by the amount of your EMI. However, with a Jumbo Insta Loan, your credit limit is not affected or blocked, allowing you to continue using your card for other transactions.

Are you looking to apply for an HDFC Bank Loan on Credit Card? Click here to get started.

Know more about the difference between a Loan on Credit Card and a Personal Loan here.

* Terms & conditions apply. Loan on Credit Card disbursal at the sole discretion of HDFC