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

APR*
2.38%
Total Amount Payable
HK$101,200
Total Interest Payable
HK$1,200
Monthly Payment
HK$8,433
  • Online instant approval and 24x7 loan disbursement for instant cash relief
  • No income proof is required
APR*
4.03%
Total Amount Payable
HK$102,160
Total Interest Payable
HK$2,160
Monthly Payment
HK$8,513

【MoneySmart x WeLend Flash Sales!!!】 Selected customers who have successfully applied for and drawn down can receive up to HK$3,000 Supermarket voucher. Welcome offer cash rebate up to HK$16,000, total reward is up to HK$19,000!

Valid until 31 Oct 2022
  • 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$102,280
Total Interest Payable
HK$2,280
Monthly Payment
HK$8,523

【Welcome offer Exclusive for MoneySmart Users】From now until 31 October 2022, download the Grantit App and use the promo code 【 Moneysmart100 】to get $100 cash reward upon approval and signing of the loan contract in the app. Get extra $500 supermarket vouchers when drawdown the loan amount HK$5,000 or above successfully within promotion period! Total rewards up to $600!

Valid until 31 Oct 2022
  • 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
APR*
1.38%
Total Amount Payable
HK$100,744
Total Interest Payable
HK$744
Monthly Payment
HK$8,395

New customers who successfully apply and drawdown the Citi Speedy Cash/Citi Card Debt Consolidation Loan can get Macbook Air M2 chip, 512 GB / Macbook Air M2 chip, 256GB / Herman Miller Sayl Office Chair / Sony PlayStation® 5 Game Console / AirPods 3rd generation/ **up to HK$10,000 Voucher/ Apple Gift Card!!!**

Valid until 16 Oct 2022
  • APR as low as 1.38%*
  • Tenor up to 60 months
  • No hidden terms and conditions
  • Loan amount up to 12X your monthly basic salary

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.