At a time when the coronavirus has impacted many industries and liquidity is in high demand, CRED — the credit card bill payments platform — has introduced an exclusive credit line for its members called CRED Stash. While it functions like a personal loan product, it offers distinct advantages. Below is a clear, concise overview of what CRED Stash offers and how it compares to traditional options.
Table of Contents
- What is CRED?
- What is CRED Stash?
- Charges
- CRED Stash Vs Personal Loans
- How much can I save?
- Application Process
- Credit Line & Eligibility
- Bottomline
What is CRED?
CRED is a members-only app for people with strong credit histories (typically a credit score of 750 and above). It consolidates credit card bill payments in one place and rewards members for timely payments. Many users have received substantial benefits since CRED’s launch in late 2018.
What is CRED Stash?
CRED Stash is a personal credit line available to eligible CRED members. It is delivered as a fully digital lending service, using the government’s CKYC system to streamline KYC. This removes lengthy verification calls and site visits, enabling near-instant approval and disbursal.
The process is simple: a few taps in the app and funds are transferred to your bank account within minutes. Because members have demonstrated strong credit behaviour over time, CRED can offer faster access and smoother processes than traditional lenders.
Charges
- Processing Fee: 1% to 2% (dynamic)
- Interest Rates: 11% to 16% (dynamic)
- Foreclosure Charges: Nil
- Part Payment Charges: Nil
Processing fees vary up to 2% depending on factors such as loan amount and credit profile. Interest rates are dynamic; in many tests the rate hovered around 13%, but it can differ by lending partner and individual parameters. Currently CRED has partnered with IDFC First Bank, with plans to add more partners.
Importantly, CRED Stash does not charge foreclosure or part-payment fees, which are commonly applied by other personal loan products.
CRED Stash Vs Personal Loans
- Instant: CRED Stash offers instant approval and disbursal for eligible members. Traditional personal loans are rarely instant unless pre-approved by a bank.
- Flexible: The credit line is flexible — you can withdraw parts of the approved amount as needed and repay without penalties. This flexibility is uncommon among standard personal loans.
- Competitive Interest Rates: Personal loans often carry rates of 16% or higher. With CRED Stash, rates nearer to 13% are possible based largely on credit history.
- Better User Experience: CRED delivers a user-friendly, frictionless process with clear loan summaries and a streamlined interface.
How much can I save?
To illustrate potential savings, consider a Rs.200,000 loan repaid halfway (Rs.100,000 outstanding). Compare CRED Stash at 13% interest with a conventional personal loan at 16%, and assume a 0.75% difference in processing fees. Approximate savings in this scenario:
- Savings on interest: Rs.3,000
- Savings on processing fee: Rs.1,500
- Savings from nil pre-closure fee: Rs.3,000
- Total approximate savings: Rs.7,500
The absence of foreclosure and part-payment charges adds tangible value and flexibility, making it easier to manage repayments and reduce costs.
Application Process
The application flow is simple and guided within the app. You can review a complete loan summary before confirming your withdrawal. Funds are transferred instantly to your selected bank account and auto-debit for EMI setup is completed digitally.
Below are screenshots showing the process steps:
Credit Line & Eligibility
- Eligibility: You must be a CRED member.
- Credit Line Amount: Determined by your credit report, score, and other conventional underwriting factors.
CRED Stash launched in beta and was initially available to a limited set of members. Rollout to all members is expected in phases over the coming weeks. You will need the latest version of the CRED app (with the redesigned UI) to access the service; eligible members will see the option on the home screen.
Bottomline
- Cardexpert Rating: 4.9/5
CRED Stash is a strong option for those needing quick access to cash for emergencies or personal needs. It combines instant, digital disbursal, competitive interest rates, flexible withdrawals, and no hidden fees. For many users, it may be preferable to personal loans, credit card EMIs, or balance transfers, which often carry higher rates and less flexibility.
CRED Stash addresses several common pain points of traditional personal loans and could influence how short-term personal credit is offered going forward.
What’s your take on CRED Stash? Feel free to share your thoughts in the comments below.