1. Is it Possible to Pay Loan EMIs with a Credit Card?
Loan EMIs are usually paid through your bank account. However, in certain cases, banks or platforms may allow credit card payments. While it sounds convenient, this option has its own pros and cons.
2. Advantages of Paying EMIs via Credit Card
Immediate Payment Relief
When you’re facing a financial crunch, using a credit card can help you avoid late payment penalties and maintain your loan repayment schedule.
Reward Points & Cashback
Some credit cards offer rewards, cashback, or loyalty points on transactions, including EMI payments. Check your card’s T&Cs to see if this applies!
3. Disadvantages to Consider
High-Interest Rates
Credit cards carry significantly higher interest rates than loans. If you don’t clear the balance on time, your overall debt could spiral out of control.
Processing Fees
Banks or NBFCs may levy processing fees or hidden charges for using credit cards to pay EMIs. Always check the fine print to avoid surprises.
Impact on Credit Score
Credit card EMI payments can increase your credit utilisation ratio.
4. Should You Use a Credit Card for Loan EMIs?
This option should be approached cautiously. While it offers immediate relief and potential rewards, the risks of higher debt and impact on your credit score are significant.
Pro Tip
If you’re considering this option, calculate all associated costs (processing fees, interest) and ensure you can pay off your credit card balance on time.