What is better credit card or Personal loan?
Credit Card or Personal Loan – It’s your choice
Personal Loan and Credit Card Loan are quick and easy loan options currently. My friend had lately bought a flat. After exhausting his home loan limit he was looking for redundant 3 Lakh to complete innards of his home. The only option left in front of him was to conclude for another loan. He approached the bank and described his problem. The bank director gave him two options. (1) Personal Loan of 6 Lakh on flat interest (2) Credit card loan of 3 Lakh. He was confused and looking for answer which bone he should conclude for- credit card loan or Personal loan? If you're also in a analogous situation then's an answer to your question.
Credit Card Loan or Personal Loan – It’s your choice
What's Credit Card Loan?
Credit Card Loan is relaxed loan offered in terms of cash advance, balance transfer or purchase. This loan is offered to credit card holder. You need to pay back loan quantum in the future by the due date.
What's Personal Loan?
Personal Loan is loan given to the existent grounded on credit history, income, and prepayment capacity. Prepayment in the case of a particular loan is through fixed quantum investiture over a fixed term.
How to Select between Credit Card Loan and Personal Loan?
It's delicate to make a choice between credit card loan and particular loan as both of them sounds analogous. Still, following points will help you in taking the correct decision.
Credit Card Vs Personal Loan
Personal loan and loan on credit card feel analogous but aren't exactly the same.
- Documentation A Personal loan requires quite a number of documents for blessing and takes a many days to come through, still loan on credit card doesn't need any attestation and is briskly to attain.
- Interest This is the most important point to be considered while taking a loan. Generally, person loans are offered at a 13-22 interest rate, while credit card loans offer interest rate of 10-18. Still, another crucial factor is that credit card loans can be profited at flat interest rates, while particular loans are available with reducing balance rates. Monthly interest in case of flat rate loans is applied on the original loan quantum and it remains the same for the entire duration of the term, indeed though the top quantum diminishments. While in case of reducing balance loan, the interest exodus decreases as and when the star is paid.
- Unsecured Loan Still, both these loans are relaxed and there's no collateral involved.
- Tenure Credit card loans can be taken for lower term ages, while Personal loans are generally long duration loans.
- Loan Amount A credit card loan is a suitable option when in need of a small quantum of loan, while with particular loans, you can mileage a huge loan.
- Operation Process – Operation process in both loan is different. Credit card loan is available fluently. You just need to walk into your bank and conclude for this loan. In case of Particular loan you need to submit form 16, bank statement, income evidence and KYC document for a loan operation. Processing time in case of particular loan is longer compare to credit card loans.
- Processing figure and pre check charges – Processing figure in both particular loan and credit card loan are same. It's generally in the range of0.5-1. The pre check charges in both cases would be in the range of 2-5. In credit card loan you can lower the term of a loan by making pre-payment. Still, the particular loan comes with a fixed duration of 12-24 months.
- Loan Quantum – A Personal loan is more suitable for a advanced quantum. If you're looking for small quantum credit card loan could be a suitable option. In this loan you'll get amount up to your credit limit.
- Interest Rate – Interest rate plays a pivotal part in the comparison. A Personal loan is offered at the interest rate of 13-22, still, credit card loans are offered at 12-15. The rate of interest depends upon a bank. Particular loans are offered in two variant flat and reducing balance rate. In flat rate, interest quantum is calculated flat on entire star. On the other hand, in reducing balance rate interest quantum will be calculated on reduced star.
