Difference Between a Personal Loan and a Credit Card Loan - Loan Trivia


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Friday 16 July 2021

Difference Between a Personal Loan and a Credit Card Loan

The two most availed options to raise funds during emergencies are Personal loans and Credit Cards. For short-term borrowings, credit cards are preferred and for a larger amount, people go for personal loans. Both of these options get you money instantly in your bank account. Loan account openings and Credit Card applications have seen rapid growth in India. 

Let us compare personal loan v/s credit card loan and find out which one is better. 



Personal Loan 

Credit Card Loan


A personal loan requires minimal documents, which then undergo processing. 

Credit Card applications require similar documents to check the income of an applicant. The process is faster. 


You do not have to pledge any assets to raise funds. 

No pledging of assets is required. Although, you get an option to apply for a credit card against your FD.  

Loan Amount

Loan amounts are usually higher in case of personal loans. 

Credit cards are considered favorable for lesser amounts. 

Loan Tenor

Personal loans are generally sanctioned for up to 60 months.

It is taken for a shorter tenor. 

Interest Rates

Usually, personal loans are offered at a 13-20% interest rate,

Credit card loans are generally higher and offered at a rate between 15-23%.  

Potential borrowers need to have a good CIBIL score in case they need to avail a personal loan or a credit card loan. A good CIBIL score gives the power to negotiate interest rates and get a higher amount sanctioned. 

Borrowers need to remember that the interest rate can be reduced in the case of personal loans, whereas flat interest rates are applied on credit card loans.  

Using the above comparison, you can choose the best financing option according to you. Bajaj Finserv provides all the above features at competitive rates and faster approvals. You can check your pre-approved loan offer by entering your name and contact details.

Must Read: Know Everything About Personal Loan and a Credit Card Loan

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