How does Loan Against Credit Card Limit Work?

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Loan against credit card is a form of personal loan. So if you have a credit card, you can use the card to apply for a loan against it. Pretty sweet, right? Unlike other forms of personal loans, there is no documentation to worry about when getting a loan against a credit card. Here’s why! Personal loans require you to submit some documents which prove your eligibility. Loans against credit cards, on the other hand, is a type of unsecured loan, no unlike same day cash loans.

There is a lot of confusion between Loan against Credit Card and Cash Withdrawals on credit card. Here In case of a loan against your credit card, the bank won’t be increasing your card’s credit limit so you can withdraw the loan with the card. That is not how it works. It’s very simple! The loan is against your credit card. If you repay the loan, you get your credit card back. Thus, the card is the security. This loan is ideal for those looking for emergency cash immediately. You can take this loan when your credit card’s cash withdrawal limit is not enough to meet your requirements.

Cash withdrawals with credit cards come with the problem of very high interest rates. But in case of a loan against a credit card, the interest is lower. It requires no documentation and the disbursal is immediate. Whatever amount you want is offered in the form of a DD or Demand Draft, and alternatively through direct transfer to your existing bank account. Does it not sound perfect? More and more people are thinking so. More and more people are choosing this type of loan.

Below is a list of top banks and what they offer as Loan against credit card

Name of the bank 

Loan amount 

Interest Rate 

Processing Fee 

Repayment tenure 

State Bank of India 

Rs.10,000 onwards 

At the discretion of the bank 

Up to 2% of the loan amount subject to a minimum of Rs. Rs.499 and a maximum of Rs.3,000 

Up to 36 months 

HDFC Bank 

Loan amount will be within the credit limit of your HDFC credit card 

At the discretion of the bank 


Up to 60 months 


Rs.10 lakh 

At the discretion of the bank 


Up to 60 months 

Bajaj FinServ 

At the discretion of the bank 

At the discretion of the bank 


At the discretion of the bank 

HSBC Bank 

At the discretion of the bank 

10.99% onwards 

2% of the loan amount 

Up to 36 months 


As you can see, many major banks are offering this service. You can apply for these easily and the disbursal is immediate. 

However there is an eligibility criteria. Generally, it is as under.

  • Banks give loans against credit cards for both existing and new customers. However, some banks offer it for existing card holders only.

  • Having a credit card account is a must.

  • One needs to have a good credit history. 

  • A person with a high and improved income level can also apply for this loan as well as top up loans against credit cards.

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