Credit Card vs Personal Loan: You can certainly use your credit card to make the transaction for the time being if you need to borrow money for temporary or lesser needs. However, loans can save the day if you need to make large purchases that exceed your credit limit.
A loan is a form of borrowing money from a bank, much like a credit card. However, using a credit card makes you responsible for monthly repayments, whereas loans have a longer repayment period. There are two options available to you when it comes to borrowing money from a bank to cover your current expenses: using your credit card or applying for a personal loan. In this article, we will tell you how different both of these options are and which one is better for you in an emergency.
Credit Card vs Personal Loan
Definitions
Credit Card: Your eligibility for a Loan on Credit Card is determined by your credit card usage, repayment history, and other factors. It can be quite helpful in the event of a financial emergency because it is a rapid and convenient means of borrowing. The interest rate for loans secured by credit cards, however, is typically higher than that of a personal loan.
Personal Loan: A personal loan is typically an unsecured loan used for a variety of things, including debt consolidation, pricey purchases, vacations, and even medical expenses. Personal loans are unsecured loans; hence, the interest rate is high.
When should I opt for a credit card loan or a personal loan?
Credit Cards
- when instant access to money is necessary.
- Whenever your need is relatively small.
- If the interest rate on your personal loan is lower than what you are receiving.
- Whenever you’re not qualified for a personal loan.
Personal Loan
- Need a loan for a comparably larger amount.
- might expect to wait up to a week for the loan to be approved and disbursed.
- Need to make a payment to a person or company that does not accept credit cards.
- wishing to evaluate many offers before selecting a loan.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER
