Key insights:
A loan on your credit card lets you borrow a portion of your available credit as a fixed loan, then repay it over time with set monthly payments. Unlike a standard purchase balance or a cash advance, this type of loan has a structured repayment plan and predictable payment amount.
- Citi® Flex Loan allows eligible cardmembers to borrow from their existing available credit without a separate application or credit inquiry
- The loan provides customers with the ability to pay it back in predictable payments over a set period
When most people think about credit cards, they think about using them for everyday purchases like groceries, travel or online shopping. But some cards also offer features that let you borrow money from a credit card in a different way.
In addition to making a purchase, you may be able to convert part of your available credit into a structured loan. You borrow a set amount from your available credit and repay it through fixed monthly payments over a set period of time.
Products like Citi® Flex Loan give eligible cardmembers another way to access funds using their available credit. Without needing to apply for a separate loan, you can choose to borrow from your available credit and have the funds deposited directly into your bank account.
In this article, we’ll explain how borrowing money from a credit card through a loan feature works. We’ll also look at how Citi Flex Loan works, how you can receive the funds and what to consider before using this option.
What a loan on your credit card is and isn’t
A loan on your credit card is different from other ways you can borrow using a credit card.
A loan on your credit card:
- Uses part of your available credit line
- Has a fixed repayment schedule
- Comes with predictable monthly payments
A loan on your credit card is not:
- A cash advance
- A separate personal loan
- An increase to your credit limit
- A new credit account
How a loan on your credit card compares to other options
| Borrowing option | How a loan on your credit card (such as Citi® Flex Loan) compares |
|---|---|
| Cash advance |
|
| Personal loan |
|
| Carrying a purchase balance |
|
How does using a loan on your credit card work?
If your credit card offers a loan feature, you can borrow money using part of your available credit. Instead of making a purchase on your credit card, you convert your available credit into a loan and repay it over time with structured monthly payments.
Accessing your available credit
First, the loan amount comes from your available credit line. In other words, you are not opening a new credit line or account. Instead, you choose an amount to borrow from the credit available on your existing card.
For example, if your card has a $10,000 credit limit and you decide to take a $3,000 loan, you’ll have $7,000 in credit left.
Choosing a repayment plan
Next, you choose how you want to repay the loan. This includes selecting a repayment period and the number of monthly payments that work for your budget. Based on the option you choose, you’ll see the amount you’ll need to pay each month. Because the payment schedule is set in advance, your monthly payment stays the same throughout the repayment period.
This structure can make repayment more predictable. Rather than carrying a balance with fluctuating monthly payments, you’ll have a payment plan with fixed monthly payments tied to the loan.
Receiving the funds
Once you confirm the loan details, the issuer sends the funds directly to you, typically by either depositing directly into your bank account or sent by check through the mail.
Repayment structure
Your loan payment appears on your monthly credit card statement as part of your balance due. Each payment follows the repayment schedule you selected, helping you steadily pay down the loan over time.
Because the loan is managed through your existing account, you can track your balance and payments alongside the rest of your card activity in one place.
Using Citi Flex Loan
What is Citi Flex Loan?
Citi Flex Loan lets eligible cardmembers borrow from their available credit and repay the amount over time with a set payment schedule. Instead of applying for a separate loan, you can choose an amount from your available credit and receive the funds directly. Then you repay the balance through fixed monthly payments added to your credit card statement.
With Citi Flex Loan, you can:
- Select the loan amount you want to borrow from your available credit
- Choose the number of monthly payments that fits your budget
- Repay the loan with predictable fixed monthly payments
Citi Flex Loan keeps the borrowing process straightforward. You don’t need to submit a separate application and requesting a loan does not trigger a new credit inquiry. The loan comes with a fixed rate for the entire repayment period, which means your monthly payment stays predictable. There’s also no origination fee.
How Citi Flex Loan works
Citi® Flex Loan is designed to be simple and flexible. If you’re eligible, you can request a loan directly through your Citi account and choose terms that work for your budget.
Step 1: Select your loan amount
Start by choosing the amount you want to borrow from your available credit. The loan comes from your available credit, so the amount you select will reduce the credit available on your card by the same amount.
Step 2: Choose a repayment schedule
Next, decide how long you want to take to repay the loan. You’ll choose a set number of monthly payments based on the options available to you. Once you select a repayment schedule, you’ll see your fixed monthly payment amount.
Step 3: Receive your funds
After you confirm the loan details, Citi sends the funds to you. The money can be deposited directly into your bank account, and many transfers arrive within one to two business days.
Benefits of using Citi Flex Loan
A loan on a credit card like Citi Flex Loan can offer several advantages for cardmembers who want flexible access to funds.
Quick access to funds
Because the loan uses your existing credit line, you don’t need to go through a traditional loan application process, and the funds will usually be sent to you within one to two business days. This can make it easier to access money when you need it.
No separate credit application
You don’t need to fill out a new loan application or go through an additional credit check. If your account is eligible, you can request a loan directly through your Citi account, with no credit checks needed.
Fixed monthly payments
Your payment amount stays the same throughout the repayment period. Knowing exactly what you’ll pay each month can make it easier to plan your budget.
Potentially faster access than some traditional loans
Since the loan comes from your existing account, you may be able to access funds sooner than you would with some traditional lending options.
For some cardmembers, this combination of convenience and predictable payments can make borrowing money from a credit card a helpful option when you need access to funds.
Things to consider before using Citi Flex Loan
While borrowing from your credit card can offer flexibility, it’s important to understand how it affects your account.
It turns part of your available credit into a structured loan
When you take a Citi Flex Loan, a portion of your available credit is set aside for the loan and repaid over time with fixed monthly payments. This helps keep repayment predictable, and your available credit increases again as you pay down the balance.
The loan appears on your credit card account
Your loan balance will appear on your credit card account and statement. This allows you to track the balance and repayment schedule alongside your other card activity.
Payment structure can affect other balances
Your Citi® Flex Loan is added to your credit card’s current balance, so your Citi® Flex Loan monthly payment will be added to the Minimum Payment Due each billing cycle until paid in full. If you pay more than your Minimum Payment Due on your credit card balance by the payment due date, then the payment amount above the minimum will generally go toward balances with higher annual percentage rates (APRs) first. If your Citi® Flex Loan has a higher APR than your credit card balance, the funds will go toward the loan. If it has a lower APR, then your payment may go toward your credit card balance.
Please refer to your Citi Cardmember Agreement for more details.
Can you pay off a credit card loan early?
There is no pre-payment penalty for Citi® Flex Loan. You can always pay off your Citi® Flex Loan early by paying your account balance in full. Other issuers may or may not have this benefit.
Is a loan on your credit card right for you?
A loan on a credit card can offer a flexible way to access funds using the credit you already have available. Options like Citi Flex Loan allow eligible cardmembers to borrow from their available credit and repay the balance over time with predictable monthly payments.
Before choosing this option, it’s a good idea to consider how the loan will affect your available credit and how the payments fit into your budget. Understanding how the repayment structure works can help you decide whether borrowing money from a credit card is the right choice for your needs.
