Reasons to opt for credit card loan instead of line of business credit

Companies, especially small to mid-sized businesses, often struggle to acquire credit from reliable sources in their time of need. An entrepreneur may need to apply for such loans across various financial institutions before finally acquiring approval. Such a lack of availability has forced many business operators to consider alternative sources of funds, namely loans on business credit cards.

A credit card loan refers to a facility available to all cardholders, using which they can avail a loan as per their credit limit availability. Generally, individuals would need to service EMIs against this loan, which includes both a principal and an interest factor. The tenure for such credit tends to vary from one financial institution to another.

Here are some of the benefits of credit card loans against other forms of unsecured lending – 

• Borrowers already know how much loan they can avail – Since a card user is already aware of his/her credit limit, the individual can also determine the maximum loan amount available and decide accordingly.

• No documentation – Credit card companies already keep all relevant financial and personal information of a cardholder. Thus, individuals do not need to complete any separate documentation process to avail these loans.

Cards like the Bajaj Finserv RBL Bank SuperCard also come with a 90-day interest-free period during which borrowers do not need to service any interest on such loans.

About This Author

Aditi Ahuja Aditi Ahuja is a noted financial consultant and adviser. Joined: August 23rd, 2018