Credit Card or Personal Loan, Know which is more beneficial
If you have to get your house renovated, or buying something new and you don’t have money, what will you do? In such a situation, you have two ways, either you pay it with your credit card and if you are not able to pay the total amount once, then get the EMI of the amount spent or you can use your personal loan. According to sources, both personal loan and credit card are better options for you.
Personal loan: This loan is generally considered as an unsecured loan, which covers the cost of medical purchases and expensive purchases made during vacation. The rate of interest charged on personal loans is also very high.
Credit card loan: A loan on a credit card does not require any type of documents, as it would have been a pre-approved loan. In this way, a certain portion of your credit card limit which is inappropriate is given as a loan.
Documents: For personal loans you have to provide some documents so that you can get a loan. However, no paperwork is required for a credit card.
Interest: Personal loan is usually given at 13 to 22 % interest, although credit card loan is given at 10 to 18 % interest. Credit card loans are taken advantage of at the flat interest rate (the interest rate is fixed), although the interest rate keeps decreasing with the loan amount decreasing in the personal loan. However, both these types of loans are unsecured.
Tenure: Credit card loans can be taken for a short time, although personal loans are usually taken for a longer period.
Loan amount: Loan from credit card is better for small amount for short duration. However a personal loan is fine for taking a large amount.