It is obvious that in today’s world money is the most valuable thing that a person can own. Not everyone has the same amount of money or the same monthly income. The people with high monthly incomes have higher purchasing power and therefore are able to afford a luxurious life. Whereas, a middle-class person struggles all his life and tries to cover his basic needs with all the savings that he accumulates his entire life.
There are some situations like marriage, medical loans and education whose expense cannot be afforded by a middle-class person, even with all their savings and monthly income. In such a condition, a person can either turn his head away from the situation or can try to manage finances through different sources.
While things education, marriage and medical emergencies can cost in lakhs, they can be paid for with the help of a loan. It is very important to plan the loan and gather all the necessary information required to avail a loan that suits according to your needs. If you are in a desperate need of funds and are confused as to which loan will be suitable for your needs, you can opt for a personal loan or a credit card loan. These loans get approved and disbursed faster than the other loans offered by the banks. Before applying for any of these, it is important that you know at least the basic information about both the loans.
What is a personal loan?
A personal loan is one of the loan services offered by financial institutions and NBFCs. They are also known as small loans as they deal with smaller amounts of money and have a shorter tenor.
What is credit card loan?
A credit card loan is a lending product offered by the banks and financial institutions, where they provide small amount loans on your credit card.
Comparison between a personal loan and a credit card loan
Interest Rate: While applying for a loan it is important to examine the interest rates offered by the lender as the interest rate affects the final repayment amount. Therefore, if the interest rate is high you might end up paying a higher amount than expected.
Some NBFCs offer interest rates on a personal loan starting from around 12 percent to 24 percent. Whereas, credit card loans have interest rates starting from 14-15 percent to 24 percent.
Availability: While you are applying for a loan it very important that you scrutinise the terms and conditions of the lender. You can apply for a personal loan or a credit card loan from any financial institution.
Amount: There is a huge difference while applying for a loan through personal loans or credit card loans. A credit card loan cannot exceed more than INR 5 lakhs, but in a personal loan, you can avail by calculating on loan calculator up to INR 25 lakhs.
While you apply for any of the followings it is important to know about the benefits and features of both.
Benefits of a credit card loan:
Quick disbursal: The credit card loans get approved within 2-3 hours and get deposited into the account of the applicant.
Amount: You can avail up to INR 2-5 lakhs on credit card loans.
Tenor: The tenor for a credit card loan starts from 6 months.
Benefits of a personal loan:
Faster approval: A personal loan gets approved within 72 hours and disbursed within 2-3 working days.
Amount: As compared to credit card loans you can avail higher amount in personal loans. You can get the approval of a loan from INR 50,000 to INR 25 lakhs on a personal loan.
Tenor: The tenor for personal loans start from 1-2 years and can go up to 5 years.
From the above points, it would be an easy referral for you to decide which loan suits you the best. It is very important to choose a loan that suits your repayment and financial conditions.