Credit Card Vs Personal Loans. Who is Better?

Not too many people earn the same amount in their monthly salary. It is evident that people with higher income lead a luxurious life where as middle and lower class people struggle all their lives to make ends meet.

Everybody goes through the same phases of life – education, marriage, medical expenses, etc. These phases can’t be met even by all the savings or income of a middle-class person. However, if the person tries he can manage funds from elsewhere. It could be either a Personal loan or a credit card loan where a middle-class person can resort to and solve the issues in his lives such as stated above.

Let us explore what these loans are.

Personal Loan –

These are also called Unsecured loans as they offer loans without any collateral for a smaller duration of time as compared to other loans.

These are offered by most Banks and NBFCs.

Credit Card Loan –

It is a product of financial institutions such as Banks and NBFCs and credit is provided on your credit card.

Let’s compare them and find out which one is better!

Rate of interest –

The rate of interest varies from lender to lender. Some lenders charge 12 to 24% for a Personal Loan whereas the rates are ranging from 14-15% to 40 % for a credit card.

Ease of availability –

It depends upon the lender how quickly and under what terms and conditions the loan is disbursed. Generally basing it on your eligibility you can get a credit card in about 2-3 hours whereas it may take few days in case of personal loans.

Amount available –

Credit cards are limited to about 2-3 lakhs of Rupees. Whereas, a personal loan can get you anything to the tune of Rs. 25 lakhs or more then that.

Result

Except in ease of availability the personal loan wins over credit cards. But when you want money on the shortest possible notice then credit cards can be availed.

Must Read: which is better personal loan or credit card loan