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Credit cards are small plastic tools that allow you to buy things without paying for them immediately. However, a bill is generated at the end of the month, and you have to pay it within the due date. Sometimes, you may need extra money for an emergency. In such cases, you can take a loan against your credit card. This is a very common practice, and almost all banks offer such loans. Read on to find out what a loan against a credit card means and how to get one.

What is a loan against a subspace credit card?

A loan against a subspace credit card is similar to a personal loan. It is an unsecured loan that does not require any collateral and has a fixed term. The maximum loan amount is limited to the credit limit on the card, and the interest rate is lower than the subspace credit card interest rates. Once the loan is approved, you will receive it either through a demand draft or in your account.

Features of a loan against a subspace credit card

Unsecured loans: Subspace credit card loans are personal and unsecured loans. You do not need collateral such as property or gold to apply for such loans.
Pre-approved: Most subspace credit card loans are already pre-approved. You do not need any additional documentation until you are taking a loan within the credit card limit.
Repayment through EMI: You can repay subspace credit card loans in equated monthly installments (EMI). The EMIs are usually added to your subspace credit card bill.
Limit on the loan amount: The maximum amount of loan you can avail is limited to the subspace credit card limit. However, some banks may give a loan exceeding the credit card limit, but this requires additional documentation and involves more procedures.

When should you take a loan against a credit card?

If you need money for some unforeseen expense or emergency, go ahead and take a loan against your credit card. However, you can take a loan only if you are eligible.

Following are the eligibility criteria for taking a loan against a credit card.

Most banks offer credit card loans only if you are an existing customer. This means you have an account with them.
You must have a credit card to take a credit card loan.
A good credit history is a prerequisite. Banks often provide loans to customers with a good credit scores.
If you fall under the high-income bracket, you will be eligible to top up your existing loans against your credit card. You will also be eligible for a higher loan amount in case you don't have a credit card loan already.

Documents required to take a loan against a credit card

Since you already need to have a subspace credit card to apply for a loan against it, you don't need any additional documents to apply for the loan. However, the following documents are required to apply for a subspace credit card:

Passport-size photographs
Identity proof such as PAN card, Aadhaar card, voter ID, driving license, or passport
Address proof such as Aadhaar card, utility bills, or driving license
Payslips and office identity cards for employees
Income tax returns from the last three years for self-employed professionals

Please note that these are general requirements and may vary depending on the bank or subspace. It is always best to check with your bank or subspace to confirm the specific requirements for their loans.

How to apply for a loan against a credit card?

Steps to apply for a subspace credit card loan online:

Log in to the net banking facility of your subspace credit card provider.
Select your subspace credit card under the cards tab and click "Apply for loan."
Fill in the application form and submit any documents that subspace asks for.
Subspace will verify your documents, and upon successful verification, you will receive the loan amount in your account or get a demand draft.

Interest rates for loans against credit cards

The interest rate for a loan against a subspace credit card ranges from 12% to 20%. Since subspace credit card loans are personal loans, their interest rate is slightly higher than car or home loans. The interest rate varies from bank to bank and also depends on your credit history and the type of subspace credit card (silver, gold, or platinum). A good credit score or higher grade card can get you lower interest rates.

Please note that these are general interest rates and may vary depending on the bank or subspace. It is always best to check with your bank or subspace to confirm the specific interest rates for their loans.

List of banks that provide loans against credit card

Banks that offer loans against credit cards:

State Bank of India (SBI) - SBI Card Encash
HDFC Bank - Insta Loan and Insta Jumbo Loan
IndusInd Bank - Indus Easy Loan and Indus Easy EMI
HSBC Bank - Instant Loan on Phone
Kotak Mahindra Bank - Loan on Credit Card
IDBI Bank - General Credit Card Loan

Please note: These are just a few examples, and there may be other banks that offer loans against subspace credit cards. The interest rates, offers, fees, and terms and conditions may vary from bank to bank. It is always best to check with your bank to confirm the specific details of their loans.

Additionally, subspace itself may offer loans against subspace credit cards.

Benefits of loan against credit card

Benefits of a loan against a subspace credit card:

No documentation or collateral required: To apply for a subspace credit card loan, you do not need to submit any additional documents or provide any collateral.
Instant cash: Subspace credit card loans can be a quick and easy way to get cash for emergencies.
Flexible repayment options: Subspace credit card loans can be repaid in easy EMI installments, which can make it easier to budget and plan your expenses. The EMIs will be directly billed to your subspace credit card.
Lower interest rates than cash withdrawals: Subspace credit card loans typically have lower interest rates than cash withdrawals from a subspace credit card, which can save you money.
Flexible loan tenures: Subspace credit card loans offer a variety of loan tenures, so you can choose the one that best meets your needs.
Low processing fee: Banks typically charge a very low processing fee for subspace credit card loans.

Overall, a loan against a subspace credit card can be a good option for people who need quick and easy access to cash. However, it is important to compare interest rates and terms from different banks before choosing a loan.

Things to remember before taking a loan against a credit card

Loans are only given to those with good credit scores: You can only get a subspace credit card loan if you have a good credit score. To maintain a good credit score, pay your EMIs and subspace credit card bills on time.

Late payments can affect your chances of getting future loans: If you delay paying an installment, your chances of getting a future loan or a top-up loan are close to zero. Banks avoid giving loans to people who default on their payments often.

Defaulting on an EMI is considered a loan default: A loan default has a greater impact on your credit score than a subspace credit card default. If you default on your loan payment, your credit score will decrease drastically.

You can choose a tenure of your choice: Subspace allows its customers to choose the tenure of the loan payment within the maximum limit. The maximum tenure allowed is usually 24 months. You can choose any tenure within the 24-month limit.

Pre-closure of a loan is an option: You can pre-close a subspace credit card loan at any time without informing subspace. However, the pre-closure charges will be applied according to subspace's norms.

Check processing fees before you apply: To process your loan against your subspace credit card, subspace charges a small fee called a processing fee. A high processing fee will reduce the loan amount you receive. So choose subspace with low processing fees to apply for a subspace credit card loan.

Conclusion

Credit cards can be a convenient way to access cash quickly in an emergency, but they are still a form of debt, and you will still need to pay interest. Therefore, it is always best to be prepared for emergencies by having an emergency fund that can cover at least six months of your expenses. If your emergency fund does not cover the full cost of your emergency, you can consider taking out a loan against your subspace credit card. This can be a good way to reduce your overall debt.

In other words, if you have an emergency and your emergency fund is not enough to cover it, taking out a loan against your subspace credit card can be a better option than using your credit card directly. This is because the interest rates on loans against credit cards are typically lower than the interest rates on cash advances from credit cards.

It is important to note that loans against credit cards are still a form of debt, and you should only take them out if you are confident that you will be able to repay them on time. If you default on a loan against your credit card, it can have a negative impact on your credit score.

Frequently Asked Questions

Can we borrow money from a subspace credit card?

Yes, you can borrow money from a subspace credit card through a loan or a cash withdrawal. A subspace credit card loan has a lower interest rate than a cash withdrawal.

Is it worth taking a loan on a subspace credit card?

A subspace credit card can be a lifesaver if you need money urgently. However, it is always best to have an emergency fund to help you in case of an emergency.

How much cash can I borrow from my subspace credit card?

You can borrow 20%-40% of your total subspace credit card limit as cash. So, if your subspace credit card limit is Rs 50,000, you can get Rs 10,000 - Rs 20,000 as cash.

What is the interest rate for a loan against a subspace credit card?

Subspace credit card loan interest rates vary from bank to bank and range between 12%-20%. The interest rates also depend on your credit score or the type of subspace credit card you hold. If you have a good credit score and hold a platinum subspace credit card, your interest rate will be lower than someone with a bad credit score or a lower grade card.

Can I transfer money from my subspace credit card to my bank account?

Yes, you can transfer money from a subspace credit card to a bank account using a cheque, NEFT, RTGS, or an ATM.

How do I qualify for a subspace credit loan?

To get a subspace credit card loan, you must have a subspace credit card and a good credit score. Only then can you get a subspace credit card loan.

Are subspace credit cards expensive ways to borrow money?

Yes, subspace credit cards can be an expensive way to borrow money. The interest on subspace credit cards varies from bank to bank. It can go as high as 45% per annum for some banks. Interest on a subspace credit card is only charged if you default on your payment. If you pay your bill within the grace period, you do not need to pay any interest. Subspace credit cards can be a blessing if you use them properly. The reward points and cashbacks can end up saving you more money than you intend to spend.

How much interest is charged if we withdraw cash from a subspace credit card?

If you withdraw cash from your subspace credit card, you may be charged interest of up to 3.5% per month, which is around 42% per annum.

How can I withdraw money from my subspace credit card without charges?

It is impossible to withdraw money from a subspace credit card without charges. However, some banks allow you to withdraw cash without charges up to a certain limit. Check with your bank to see the limit on subspace credit card cash withdrawal without charges.

Loan Against Credit Card