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.
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
Cheaper than cash advances
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
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
- Online instant approval and 24x7 loan disbursement for instant cash relief
- No income proof is required
WeLend Personal Loan
- The lowest APR
- 1.38%
- Total Amount Payable
- HK$205,760
- Total Interest Payable
- HK$5,760
- Monthly Payment
- HK$8,573
Limited Time Offer🔥: Free iPhone 16 Pro!
During the Promotion Period, selected customers who have successfully applied for and drawn down with a net loan amount of HK$800,001 or above, on the designated Personal Loan with a minimum loan tenor of twenty-four instalments shall be eligible to receive one iPhone 16 Pro 128G (Retail value HK$8,599).
⠀⠀
MoneySmart Exclusive Offer － Regardless of Approval：
From 1 October until 31 October 2024, applying WeLend Personal Loan / Civil Servant & Professional Loan / Card Debt Consolidation Loan / Tax Loan, completed the entire application process (including checking of credit report) and have submitted all required documents and information, can get extra 5,000 SmartPoints *(can redeem value of HK$500 vouchers or products)*regardless of approval.
⠀⠀
Investment + Loans: Ultimate 5 Rewards 🎉 : Successfully opening a designated online brokerage account via MoneySmart, get up to HK$38,300 Rewards in 3 simple steps, including up to HK$3,500 vouchers!→ Visit the event page for more information.
- 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.