Credit Card Loan - Fast and Easy, but at a Cost

Admittedly, a credit card loan is a really fast and easy way to borrow money from your credit card issuer to enjoy instant cash relief. However, a loan from a credit card could break your bank as its interest rates are very high. You can consider other alternatives like personal loans to ease your financial burden.

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What is a credit card loan?

Credit card loan is money credit card holders borrow based on their credit cards limit and then pay back monthly over an agreed repayment term with the card issuer. The amount you can borrow mainly hinges on your current available credit. Once a loan amount and repayment term is selected, the issuer will transfer the cash to your designated bank account within a few days. Although its interest rates are much lower than cash advance on credit cards, it is still high compared to personal loans. 

Risks of taking Credit Card Loan

Taking out a credit card loan will increase your credit utilization rate i.e. the percentage of your used credit limit. To keep a good credit score, it is recommended that you keep your total utilization rate below 30%. A credit card loan can push your utilization rate above this number and therefore it will be detrimental to your credit score.

Benefits of Credit Card Loan

Fast and easy

Credit card loan is fast and easy as it doesn’t require the card holders to submit any supporting documents nor fill in any forms. This information is already available as card holders are already existing customers so it’s really tempting for the card holders to apply for it as it almost requires no application other than clicking a few buttons on the apps or via its website. However, it all comes with a cost.

Cheaper than cash advances

Compared to cash advances, credit card loans are cheaper but it is not cheap at all.

Credit Card Loan alternatives : Personal Loans

It is wise to consider other options that are available to you before taking out a credit card loan. For example, personal loans provide a much lower interest rate and some can offer instant approval and cash disbursement for instant cash relief.

What is a Personal Loan?

There are different kinds of personal loans such as quick loan, debt consolidation loan, tax loan etc, that suit your varying purposes and they come with different interest rates. If the loan amount you would like to borrow is small, it is not necessary to provide supporting documents such as proof of address nor income proof. Some lenders even offer easy approval and same day disbursement to ease your financial burden immediately. It is better than credit card loans because the interest rate is usually much lower. 

Best Personal Loans to replace Credit Card Loans

MoneySmart Exclusive
MoneySmart Exclusive

PrimeCredit Fixed Loan

The Lowest APR
1.18%
Total Amount Payable
HK$202,400
Total Interest Payable
HK$2,400
Monthly Payment
HK$8,433

[MoneySmart Exclusive Offer] Up to HK$12,000 Cash

【June Pop-up Offer!*From now on until 30 June, apply for designated PrimeCredit Loan via MoneySmart, you can earn the application bonus valued at HK$500 cash vouchers (given out as 5,000 SmartPoints) regardless of approval! But that's not all - SmartPoints can be freely exchanged for cash vouchers from 20+ brands! Click here to learn more.

Valid until 30 Jun 2024
  • Online instant approval and 24x7 loan disbursement for instant cash relief
  • No income proof is required
MoneySmart Exclusive
MoneySmart Exclusive

WeLend Personal Loan

The lowest APR
1.88%
Total Amount Payable
HK$205,760
Total Interest Payable
HK$5,760
Monthly Payment
HK$8,573

 Selected customers can receive up to HK$16,000 Cash Rebate upon successful draw down!

🔝💥Combo offer in June - MoneySmart exclusive offer of $1,000 application bonus】 From now until 30 June, successfully apply for Welend Personal Loan/ WeLend Card Debt Consolidation Loan/ Civil Servant & Professional Loan via MoneySmart,  you can earn extra HK$500 Deliveroo Gift Card & HK$500 vouchers (given out as 5,000 SmartPoints) regardless of approval! T&Cs apply.

Valid until 30 Jun 2024
  • No income proof & address proof is required for loan amounts under $150,000
  • The entire application process can be done online anytime anywhere.
  • A.I can provide instant approval and loan disbursement.
APR*
4.2%
Total Amount Payable
HK$209,120
Total Interest Payable
HK$9,120
Monthly Payment
HK$8,713
  • Offer quick and easy applications without reviewing your TU credit score.
  • The entire application process can be done via one-app without showing up in person.
  • Offer quick approval and cash disbursement

How to apply for personal loans?

Nowadays, many money lenders offer quick loans with a speedy application process. To apply for such loans, all you need to do is to simply go online and fill in your personal particulars. There is no need to show up in person  throughout the entire loan application process. You will get a decision in a short period of time, typically within 1 hour.

FAQ

Can I get a loan with a credit card?

Yes, you can. Your unused credit limit can turn into instant cash.

What is a credit card loan?

Credit card loan is money you can borrow based on your credit cards limit and then you are required to pay back monthly over a fixed period of time.

Who can take out personal loans?

As long as you are 18 or above with a monthly salary of at least HK$5,000, you are eligible to apply for personal loans. To apply, you are required to provide your identity card, residential address proof, bank statement, and salary slip. Having said that, if the amount that you wish to borrow is small, you might not be required to submit residential address proof, bank statement, or salary slip.