What is better credit card or Personal loan?
Credit Card or Personal Loan – It’s your choice
Personal Loan and Credit Card Loan are fast and easy loan choice currently. My friend had lately got a flat. After go through his home loan limit he was looking for unnecessary 3 Lakh to complete innards of his home. The only choice left in front of him was to complete for another loan. He take to the bank and described his problem. The bank director gave him two choice. (1) Personal Loan of 6 Lakh on flat interest (2) Credit card loan of 3 Lakh. He was confused and looking for the answer which bone he should complete for credit card loan or Personal loan? If you're also in a like 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 amount 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 option 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 need totally a number of documents for protection and takes a many days to come through, still loan on credit card doesn't need any confirmation and is briskly to attain.
- Interest This is the most all important point to be through out while taking a loan. Normally, 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 obtainable with decease balance rates. Monthly interest in case of flat rate loans is appeal on the original loan amount and it continue the same for the entire period of the term, indeed though the top amount diminishments. While in case of decrease balance loan, the interest exodus decline 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 obtainable easily. You just take to walk into your bank and complete for this loan. In case of Particular loan you need to submit form 16, bank statement, income proof and KYC document for a loan working. Processing time in case of particular loan is longer balance to credit card loans.
- Processing figure and pre check charges – Processing figure in both particular loan and credit card loan are same. It's normally 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 period of 12-24 months.
- Loan Quantum – A Personal loan is more acceptable for a new amount. If you're looking for small amount credit card loan could be a acceptable choice. In this loan you'll get amount up to your credit limit.
- Interest Rate – Interest rate plays a pivotal part in the balancing. 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 variation flat and decrease balance rate. In flat rate, interest amount is calculated flat on entire star. On the other hand, in decrease balance rate interest amount will be calculated on decrease star.
