New Delhi, July 30 -- A credit card loan permits a cardholder to borrow a portion of their existing credit limit as a personal loan. The approval for the same is given without fresh documentation or a lengthy approval process. It is essentially a pre-approved facility provided to a credit card holder based on several factors such as usage history, repayment potential, credit history and the strength of one's overall credit profile.

A credit card loan is an unsecured credit facility. It is tied to the credit card holder's unused credit limit. In this, instead of using the credit card to make any purchases, the credit card holder withdraws funds generally transferred to a bank account.

Further, the amount borrowed is simply blocked or dra...