An Overview of Credit Card Loans in the UAE
Credit cards are an important part of your life and are one of the most commonly used methods for cashless payments due to the ease and convenience they provide. You can purchase whatever you need only by swiping the card and paying for it later.
There are many uses of these cards other than the rewards earned by the customers by making transactions using their cards. What if you wish to make a huge purchase or are in need of funds urgently? This is where the loans offered on credit cards are handy. You will receive an instant loan transferred to your account without any waiting and documentation.
You get the loan for the amount, which lies within the spending limit of your card and sometimes even for amounts that are beyond this limit. You may also get the option to pay for the purchases using Smart EMIs.
These days, the loans on a credit card are becoming famous gradually. Such loans or borrowing are a kind of a personal loan. But loans on the card are approved in advance. They are amongst the easiest and the fastest way of borrowing funds.
Since these loans are approved in advance, the customers do not need to submit any additional documents. The loans get processed & disbursed fast, almost instantly. These loans are considered to be a type of loans that are unsecured.
Benefits of Credit Card Loans
There are many benefits of credit card loans, some of which are listed below.
No Guarantor Involved
These loans are collateral-free and unsecured. Hence, you can skip the trouble of providing a guarantor or pledging security or post-dated cheques.
With these loans, you will have many options for clearing the installments. You can either repay the loan by making the payments by the option of EMI amount being deducted from the monthly spending limit of the credit card, or you may choose the option where the amount gets deducted automatically from the savings account on a different card number generated especially for this purpose.
Flexible and Fast
Credit card loans get distributed instantly. In fact, it includes no processing or application or waiting period like in the conventional products of loan. Sometimes, the banks may offer you the option of converting the purchases into installments after buying the items.
Balance Transfer Facility
Some banks also offer you the option of transferring the outstanding balance from the other cards to a single card and make payment of the balances in installments through a loan on your credit card. In this way, you will not have to stress about clearing different loans in separate accounts. With this facility, you will be able to consolidate your loans into one account and make their payment in the form of EMIs.
Who all are eligible for getting Credit Card Loans?
For being eligible to get such a loan, it is necessary to have a good credit history and a card account. Usually, banks provide such loans to existing and new customers. However, there are some banks, which offer such credit card loans just to their existing credit card members.
Generally, the banks may offer such loans to people with an improved level of income and a good record for credit repayment, which adds up to the eligibility for the loans.
What Amount of Loan can one Borrow?
The amount you can borrow as a loan on your credit cards is based on their credit limit. Further, the spending limit is based on the income, history of repayment, documentation, and other such factors. Usually, the amount of loan is more as compared to the limit of cash withdrawal on your credit card. The rate of interest charged on these loans can be higher than that charged on other kinds of loans.
There are many banks in the UAE that offer credit card loans to customers. You can visit the website of the concerned bank, call their customer care agent, or visit the nearest branch for more information.