Loan on credit card and cibil link

[zenchill]

Most credit cards offer two types of loan options to card holders

Loan Against the available Credit Card Limit and Loan Above Credit Card Limit.

Let’s assume a card holder has a card with 1 Lakh limit and is being offered loan under both cases.

In case the user avails option 1 and takes a loan of 1 Lakh let’s assume for 12 months. So does that mean his credit utilization for the card is 100%? That means cibil will take it as a negative even with timely repayment?

In case the user avails option 2 and since it’s a pre approved sort of offer does that show up as another loan in cibil or is combined under the CC account?

From a cibil point of view which of the options are better?

 

[KunalJ]

Guys, any idea how much impact an OD against MF would have on credit score.

 

[paxauquabriba-4876]

Most credit cards offer two types of loan options to card holders

Loan Against the available Credit Card Limit and Loan Above Credit Card Limit.

Let’s assume a card holder has a card with 1 Lakh limit and is being offered loan under both cases.

In case the user avails option 1 and takes a loan of 1 Lakh let’s assume for 12 months. So does that mean his credit utilization for the card is 100%? That means cibil will take it as a negative even with timely repayment?

In case the user avails option 2 and since it’s a pre approved sort of offer does that show up as another loan in cibil or is combined under the CC account?

From a cibil point of view which of the options are better?

btw is a new hard enquiry done/shows up on cibil ?

 

[praful47]

View attachment 40228

This is the seperate account that it shows. Unlike other accounts, it's account number has "L or I" at end whereas in other accounts it's usually card no last digits. Also it's initiation date is same as issue date of the card on which loan was given.

did you cibil dropped ?

 

[Itsoldsport]

did you cibil dropped ?

I don't recall very well but my cibil hasn't dropped significantly during those days, maybe 5-10 points down at max then few points up, That's how it's been.

 

[praful47]

I don't recall very well but my cibil hasn't dropped significantly during those days, maybe 5-10 points down at max then few points up, That's how it's been.

5-10 points is huge if one's.. cibil is less than 780

 

[Itsoldsport]

5-10 points is huge if one's.. cibil is less than 780

Yeah, that's max I am saying might have been 2 or 3 but 10 point was max I have seen go down and it was probably due to a few loans or enquiries.

 

[prashu]

I took both types of loans few months ago.
1) Loan within credit limit - Reflects as total outstanding. Greatly affects cibil score. Utilization ratio goes up as outstanding goes up. I got offer of 13% on reducing basis from SBI. Took 1L for home renovation. Preclosed after 3 months.
2) Loan outside credit limit - No presence in cibil. I got offer of 12.5 % on reducing basis from ICICI. On call they reduced additional 1% with 0 processing fees. Took 3L. Used some money to close SBI loan and remaining amount for home renovation. Still 7 months remaining for this to get completed.

Got a call from icici for loan against credit card within limit 2.63L 3yr tenure. She promised to provide at roi 11% and 1% processing fee. Is worth taking it ? Need for some personal reasons.

 

[DaDarkkNight]

Got a call from icici for loan against credit card within limit 2.63L 3yr tenure. She promised to provide at roi 11% and 1% processing fee. Is worth taking it ? Need for some personal reasons.

Processing fee can be made 0% too, negotiate with them. I think for higher amounts like 4-5lac they would waive off the processing fee completely. I hope 11% is the reducing rate of interest here. Also, there is a 15 day cancellation period without any charges, so pls confirm that, if your needs suffice within 15 days, then its a boon

 

[VasukiVasuki is verified member.]

Processing fee can be made 0% too, negotiate with them. I think for higher amounts like 4-5lac they would waive off the processing fee completely. I hope 11% is the reducing rate of interest here. Also, there is a 15 day cancellation period without any charges, so pls confirm that, if your needs suffice within 15 days, then its a boon

Reducing on personal loan u kidding

 

[DaDarkkNight]

Reducing on personal loan u kidding

not kidding, i have availed personal loan from icici before of 10lac at 11% reducing rate of interest, works same way as in home loan, the more you pay earlier, lesser interest to be paid on remaining principle amnt

 

[VasukiVasuki is verified member.]

not kidding, i have availed personal loan from icici before of 10lac at 11% reducing rate of interest, works same way as in home loan, the more you pay earlier, lesser interest to be paid on remaining principle amnt

Noice 👍 .

 

[prashu]

Processing fee can be made 0% too, negotiate with them. I think for higher amounts like 4-5lac they would waive off the processing fee completely. I hope 11% is the reducing rate of interest here. Also, there is a 15 day cancellation period without any charges, so pls confirm that, if your needs suffice within 15 days, then its a boon

Yes it is reducing roi. Availed 2.64L , 8643/- per month for 36months.EMI statement is reflecting on credit card. No partial payment option is provided.

 

[DaDarkkNight]

Yes it is reducing roi. Availed 2.64L , 8643/- per month for 36months.EMI statement is reflecting on credit card. No partial payment option is provided.

Yeah i forgot, u cannot prepay lumpsum amnt, it will be regularly billed every month, only option is pay whole for foreclosure. BTW u still have 15 day no question asked full cancellation policy

 

[prashu]

Yeah i forgot, u cannot prepay lumpsum amnt, it will be regularly billed every month, only option is pay whole for foreclosure. BTW u still have 15 day no question asked full cancellation policy

Got it ! But i have loan requirement so I don't wanna cancel it.

 

[sahildca]

not kidding, i have availed personal loan from icici before of 10lac at 11% reducing rate of interest, works same way as in home loan, the more you pay earlier, lesser interest to be paid on remaining principle amnt

and 18% GST on Interest (only incase of Credit Card Loan )

 

[DaDarkkNight]

and 18% GST on Interest (only incase of Credit Card Loan )

Yes, somewhere i read one person even fought for this gst charged on personal loan (based on cc) and finally got it reversed after complaining to RBI ombudsman

 

[sahildca]

Pre-approved Loans (No Documents asked, Loan disbursal in account within 24-48 hours )

Personal Loan on Bank app= Principal + Interest (No GST on Interest) + Processing fee with GST

Personal Loan on Credit Card (WTL - Within The Limit) = Principal + Interest with GST(18%)+ Processing Fee(0-3%) with GST(18%) (Block that much Credit Limit, loan amount within the card limit )

Personal Loan on Credit Card (OTL- Over The Limit)=Principal + Interest with GST(18%)+ Processing Fee(0-3%) with GST(18%) (No Effect on Credit Limit, loan amount can be above the card limit)

*Loan Foreclosure fee(2-3% of Outstanding Principal ) may be apply on all types of loan depending upon bank.

*ROI (Rate Of Interest) will be on Reducing Basic mostly (but please confirm before taking loan whether it will be Reducing or Flat, sometime they mis-sell by telling you flat rate 11% which will becomes 19.57% in Reducing )
you can compare both types here https://cashkumar.com/flat-interest-rate-vs-reducing-balance-interest-rate-calculator

 

[DaDarkkNight]

*ROI (Rate Of Interest) will be on Reducing Basic mostly (but please confirm before taking loan whether it will be Reducing or Flat, sometime they mis-sell by telling you flat rate 11% which will becomes 19.57% in Reducing )

Mis-selling will be when the agent says the ROI is 11% reducing but it turns out to be 11% flat in actual, not the other way round which you described. The reducing rate of 11% for the OP's scenario is similar to a flat interest of 7% (inclusing gst component) in this case.

 

[prashu]

Pre-approved Loans (No Documents asked, Loan disbursal in account within 24-48 hours )

Personal Loan on Bank app= Principal + Interest (No GST on Interest) + Processing fee with GST

Personal Loan on Credit Card (WTL - Within The Limit) = Principal + Interest with GST(18%)+ Processing Fee(0-3%) with GST(18%) (Block that much Credit Limit, loan amount within the card limit )

Personal Loan on Credit Card (OTL- Over The Limit)=Principal + Interest with GST(18%)+ Processing Fee(0-3%) with GST(18%) (No Effect on Credit Limit, loan amount can be above the card limit)

*Loan Foreclosure fee(2-3% of Outstanding Principal ) may be apply on all types of loan depending upon bank.

*ROI (Rate Of Interest) will be on Reducing Basic mostly (but please confirm before taking loan whether it will be Reducing or Flat, sometime they mis-sell by telling you flat rate 11% which will becomes 19.57% in Reducing )
you can compare both types here https://cashkumar.com/flat-interest-rate-vs-reducing-balance-interest-rate-calculator

I have availed with reducing interest rate. Everymonth the principal amount is increasing as interest is decreasing. This is called reducing roi. Am I correct?