What Are Advance Loans?

There could be times in life when you may need money urgently. Whether to pay for sudden expenses or medical contingencies, you may need to make the payment imminently and may not have time to apply for a loan. At such times, a Credit Card can come to your rescue. Yes, you can obtain a Cash Advance Loan using your Credit Card. This article explains what Cash Advance Loans are, their features, and how they work. Read on to know more.

A Cash Advance Loan, also known as an Advance Loan on Credit Card is a short-term loan you can obtain from your Credit Card provider. If you have a Credit Card, you automatically qualify for this facility as your creditor typically provides a cash withdrawal limit on the card. This limit differs from your monthly credit limit and is usually lower than the credit limit.

The way a Cash Advance Loan works is rather simple. It does not involve any specific application and fund disbursement processes. As long as you have your Credit Card or its details handy and you know the Cash Advance limit on your card, you can get the loan in different ways.

However, unlike your Credit Card bills, which are interest-free if you pay your outstanding dues on time, the Cash Advance limit is not free of interest. You typically have to pay interest irrespective of how much money you have borrowed – whether the sum is small or significant.

You can obtain Cash Advance Loans online and offline. Here are the methods:

At ATMs

The simplest way to obtain the Cash Advance offline is to visit the ATM kiosk of your Credit Card issuing bank and withdraw money like you would using your ATM or Debit card. Insert the card in the card slot, enter your Credit Card PIN, choose cash withdrawal and enter the amount you want to withdraw (up to the applicable withdrawal limit).

At Bank Branch

Another way to obtain the Cash Advance offline is to visit the Credit Card issuing bank’s branch. There, you can conduct an over-the-counter transaction with help from a bank representative. If you choose to conduct the transaction at a bank branch, you must ensure you carry your ID card and Credit Card with you for verification.

Through Net/Mobile Banking

Some creditors also allow you to withdraw cash on your Credit Card via the internet and mobile banking platforms. While the exact steps may vary from bank to bank, you typically need to choose the option to transfer money from your Credit Card to your preferred bank account. You can reach out to your creditor for assistance regarding this process.

The following are some general features of Cash Advance Loans:

• You can get instant, short-term funding without undergoing approval or disbursal processes.
• The interest and fees payable depend on the sums withdrawn and the repayment tenure.
• The interest rates on Cash Advances are higher than those levied on general Credit Card spends.
• The interest accrual begins immediately and you do not get a grace period on Cash Advances.
• Lenders charge additional fees on withdrawing the Cash Advance sum from other bank ATMs.

Whether you need a Cash Advance or a Personal Loan, you can always depend on HDFC Bank. As an existing HDFC Bank customer, you can take advantage of our paperless Xpress Personal Loans that allow you to enjoy swift loan disbursements. You can apply for the Xpress Personal Loan online and get instant, effortless funding.

​​​​​​​*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Personal Loan at the sole discretion of HDFC Bank Limited. Loan disbursal is subject to documentation and verification per the bank’s requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.