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Tuesday 15 March 2022

What is better credit card or Personal loan?

 What is better credit card or Personal loan? 

Credit Card or Personal Loan – It’s your choice 

Particular Loan and Credit Card Loan are quick and easy loan options presently. My friend had recently bought a flat. After exhausting his home loan limit he was looking for spare 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) Particular 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 Particular loan? If you are also in a similar situation also'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 amount in the future by the due date. 

What's Personal Loan? 

Personal Loan is loan given to the existent predicated on credit history, income, and repayment capacity. Repayment in the case of a particular loan is through fixed amount installment 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 similar. 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 Particular loan requires quite a number of documents for blessing and takes a numerous days to come through, still loan on credit card does not need any documentation and is hastily 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 pivotal factor is that credit card loans can be served at flat interest rates, while particular loans are available with reducing balance rates. Yearly interest in case of flat rate loans is applied on the original loan amount and it remains the same for the entire duration of the term, indeed though the top amount diminishments. While in case of reducing balance loan, the interest outpour decreases as and when the star is paid. 
  • Unsecured Loan   Still, both these loans are relaxed and there is no collateral involved.  
  • Tenure Credit card loans can be taken for lower term periods, while Particular loans are generally long duration loans. 
  • Loan Amount  A credit card loan is a suitable option when in need of a small amount of loan, while with particular loans, you can avail a huge loan. 

After comparing both loans, you can make a choice predicated on your financial need, time frame for which you need the loan and how soon you need it.However, it's easier for you to make the right choice, If you are clear about your demand. 

  • Operation Process – Operation process in both loan is different. Credit card loan is available easily. 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 substantiation 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 rangeof0.5-1. 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 makingpre-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 amount. If you are looking for small amount credit card loan could be a suitable option. In this loan you will get amount up to your credit limit. 
  • Interest Rate – Interest rate plays a vital part in the comparison. A Particular 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 amount is calculated flat on entire star. On the other hand, in reducing balance rate interest amount will be calculated on reduced star. 

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