Loan Payments – Gain Control Without Cash (2026)

When financial pressures mount, many Australians look for ways to manage their cash flow more effectively. One question that often arises is whether you can make a loan payment with a credit card. At first glance, this option might seem like a convenient way to juggle finances, but it’s crucial to understand the implications before proceeding. With our expertise at Esteb and Co, where we partner with over 83 lenders, we aim to provide clarity on whether this is a viable solution for you.

Understanding Loan Payments with Credit Cards

Before diving into whether you can pay your loan with a credit card, it’s important to grasp the fundamental mechanics involved. Typically, loan payments are made directly from a bank account or through direct debit arrangements. Using a credit card introduces an intermediary step that may involve additional fees or interest rates.

Credit cards are designed for short-term borrowing with interest rates that can be significantly higher than personal loans. While it might be tempting to use available credit to cover a loan payment, the long-term financial impact could be detrimental if not managed carefully.

Current Market Information and Options

In 2026, the Australian financial landscape offers various loan products with interest rates typically ranging from 6.49% to 12% for personal loans. Credit card interest rates, however, often exceed these, averaging around 15% to 20%.

Some financial institutions may allow you to pay a loan instalment using a credit card, but this is not the norm. When it is allowed, it usually involves a third-party service that processes the payment for a fee, which can range from 1% to 3% of the transaction amount.

Steps to Pay a Loan with a Credit Card

If you decide to proceed with using a credit card to make a loan payment, here are the steps you might need to follow:

1. Check with Your Lender: Confirm whether they accept credit card payments directly or through a third-party service.
2. Understand the Fees: Identify any fees involved in the transaction. These could add up over time and negate any short-term cash flow benefits.
3. Use a Payment Service: If allowed, use a payment service that facilitates credit card payments for loans. Ensure the service is reputable and secure.
4. Calculate Interest Impact: Compare the interest rates on your credit card versus your loan. High interest on the credit card can accumulate quickly.
5. Set a Repayment Plan: Ensure you can pay off the credit card balance promptly to avoid additional interest costs.

Expert Tips and Considerations

As experts in the field, Esteb and Co offer the following advice:

• Evaluate Alternatives: Consider other options such as renegotiating loan terms or seeking a temporary repayment holiday before using a credit card.
• Check Eligibility: Not all lenders allow credit card payments. Our panel of 83+ lenders provides a variety of options, so consulting with a broker can reveal alternatives.
• Budget Wisely: Ensure that using a credit card does not lead to a cycle of debt. Assess your budget to handle additional credit card payments.
• Consider Balance Transfers: If you decide to use a credit card, look for one with a low-interest balance transfer offer to minimise costs.

Frequently Asked Questions

1. Can I pay my mortgage with a credit card?
   No, most mortgage lenders do not allow payments via credit card due to the high transaction fees involved.
2. Are there any benefits to using a credit card for loan payments?
   While it may offer temporary relief in cash flow, the high interest rates and fees can outweigh the benefits if the balance is not repaid quickly.
3. What are the risks of paying a loan with a credit card?
   The main risks include accruing high-interest debt and potential fees, which can lead to a cycle of debt if not managed properly.
4. Should I consider a balance transfer to pay off my loan?
   A balance transfer can be a strategic option if you're disciplined about repayment and find a card with a favourable interest rate.
5. How can Esteb and Co assist me with loan management?
   We have access to 83+ lenders and can provide tailored advice to help you manage your loans effectively and explore refinancing options if needed.