Loan against credit card is an expensive way to get immediate liquidity

Loans against credit cards can be availed of quickly, but charge high interest rates, processing fee and prepayment penalty

Loan against credit card is one of the fastest ways of securing credit. IT professional Vimal Singh, 34, realised this when he needed money urgently to clear his dues for a property. “I approached the card issuer — HDFC Bank — and within minutes it processed a loan of Rs 1,95,000 against my credit limit (at that time) of Rs 2,12,000. The interest rate was 11.88 per cent per annum. I could have gone for a personal loan, but this was a more convenient way to get instant liquidity,” says Singh.

Adds Ambuj Chandna, senior executive vice-president and head, consumer