Can We Pay Loan EMI Through Credit Card? Pros, Cons & Alternatives

When the month-end arrives, one of the biggest concerns for many is paying EMIs on time. Usually, these payments are set up through a bank account, but what if you don’t have enough balance in your account and your credit card has available limit?

This naturally raises the question — can we pay loan EMI through credit card?

While it sounds like a convenient backup option, the reality is a little different. Banks generally don’t allow direct EMI payments through credit cards, but there are some exceptions and third-party services that make it possible.

Before you try this route, it’s important to understand how it works, the benefits, and the risks involved.

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Can You Pay Loan EMI Through Credit Card?

The straight answer is no, you cannot directly pay your loan EMI through a credit card with banks or NBFCs. Most financial institutions only allow EMI payments through savings accounts, net banking, or auto-debit instructions (ECS/NACH).

This is because a credit card itself is an unsecured loan, and using one loan to pay off another can increase financial risks both for you and the lender.

However, there are exceptions. Over the last few years, several fintech platforms and apps have introduced features that let you use your credit card to pay bills, including EMIs. Apps like CRED, Paytm, and certain digital wallets sometimes support EMI payments by acting as an intermediary. This doesn’t mean your bank is accepting credit card EMI payments directly; instead, the platform processes your credit card payment and forwards it to your loan account.

So while the traditional banking route won’t allow this option, third-party apps provide a possible workaround.

Also Read: Can I Send Money from a Credit Card?

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How Does It Work (If Allowed)?

When you choose to pay your EMI through a credit card using a third-party app, the process usually looks like this:

1. Log in to the platform – Open a trusted app like CRED or Paytm that supports loan repayment options.
2. Enter loan details – Fill in your loan account number, EMI amount, and select your loan provider from the list available.
3. Select credit card as payment mode – Instead of paying from your bank account, choose your credit card.
4. Credit card is charged – The app charges your credit card for the EMI amount.
5. App forwards payment to lender – The EMI is credited to your loan account, marking it as paid on time.

In simple words, the third-party app acts as a bridge between your credit card and your loan account.

Example

Suppose your EMI is ₹10,000, but your savings account has only ₹2,000 left. You log in to CRED, enter your loan details, and choose to pay with your credit card. CRED charges your credit card ₹10,000 and then settles your EMI with the bank. Later, you’ll need to pay back the ₹10,000 to your credit card company by the due date.

While this method can help you avoid late penalties on your loan, it comes with some important points to consider:

• Platforms often charge a processing or convenience fee for credit card EMI payments.
• If you don’t pay your credit card bill on time, the interest charged can be very high.
• Not all loan providers are supported, so availability depends on the platform.

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Pros of Paying EMI Through Credit Card

Paying your EMI through a credit card isn’t the first option banks recommend, but in certain situations, it can be helpful. Here are some advantages:

1. Emergency Liquidity Support
   If your savings account is low on funds but your EMI due date is close, paying through a credit card can save you from defaulting. This temporary liquidity can be a lifesaver during cash-flow crunches.
2. Earning Reward Points or Cashback
   Some credit cards offer reward points, cashback, or miles for every transaction. If your card issuer counts EMI payments made via third-party apps under “eligible transactions,” you might benefit from rewards while clearing your EMI.
3. Avoiding Late Payment Penalties
   Missing an EMI can lead to late fees, a negative impact on your credit score, and higher future interest rates. By using your credit card as a backup, you ensure your EMI is paid on time, protecting your financial credibility.

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Cons and Risks Involved of Paying EMI Through Credit Card

While the idea of paying EMIs with a credit card sounds convenient, it comes with serious risks if not managed carefully.

1. High Interest on Credit Card Outstanding
   Unlike loans, which have structured interest rates, credit card balances can attract 30–40% annual interest if not paid on time. Rolling over your EMI payment into your credit card bill can quickly snowball into unmanageable debt.
2. Extra Charges and Processing Fees
   Third-party apps usually charge a convenience fee or processing cost for handling EMI payments through credit cards. These extra charges reduce the financial benefit and make the option more expensive in the long run.
3. Risk of a Debt Trap
   Using one loan (credit card) to pay another loan (EMI) can be risky. If you rely on this method frequently and fail to clear your credit card bills in full, you may fall into a cycle of borrowing to repay, creating a debt trap that’s hard to escape.

Also Check : How to Pay LIC Premium Through Credit Card: A Complete Guide

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Alternatives to Consider For Paying EMI Through Credit Card

If paying EMIs through a credit card feels risky or too expensive, there are safer alternatives you can explore:

1. Set Up Auto-Debit from Savings Account

Most banks and NBFCs allow you to link your savings account for automatic EMI deductions. This ensures timely payments and avoids the hassle of remembering due dates. Keeping a buffer balance in this account also prevents missed payments.

2. Loan Restructuring or EMI Moratorium (in Emergencies)

If you’re facing a genuine financial crunch, reach out to your bank. Many lenders offer restructuring options where EMIs can be reduced, tenure extended, or a temporary moratorium granted. This helps ease your burden without shifting the debt to a high-interest credit card.

3. Balance Transfer or Personal Loan

If your current loan’s EMIs are too heavy, you can consider a balance transfer to another lender offering a lower interest rate. Alternatively, taking a small personal loan with lower interest than a credit card can help manage short-term cash needs without falling into high-interest debt.

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Conclusion

So, can you pay loan EMI through credit card? The answer is yes, but not directly with banks. It’s only possible through certain third-party apps like CRED or Paytm. While this method can help in emergencies—like avoiding late fees or protecting your credit score—it comes with extra charges and the danger of piling up credit card debt if not managed carefully.

The best approach is to rely on safer alternatives like auto-debit from your savings account, loan restructuring, or balance transfers. Using a credit card for EMI payments should be your last resort, not a regular practice. With smart planning, you can keep your EMIs on track without risking your financial health.

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