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07/03/2022

What is better credit card or Personal loan?

 What is the better credit card or Personal loan? 



Credit Card or Personal Loan – It is your choice 

Personal Loan and Credit Card Loan are the quick and easy loan options currently. My friend had lately bought a flat. After the exhausting his home loan limit he was a looking for the redundant 3 Lakh to the complete innards of his home. The only option left in the front of him was to the conclude for another loan. He approached the bank and described his problem. The bank director gave him two options. (1) Personal Loan of the 6 Lakh on a flat interest (2) Credit card loan of 3 Lakh. He was a confused and looking for the answer which bone he should conclude for- credit card loan or Personal loan? If you are also in a analogous situation then's an answer to the your question. 



Credit Card Loan or Personal Loan – It is your choice 


What's Credit Card Loan? 



Credit Card Loan is relaxed loan offered in the terms of cash advance, balance transfer or purchase. This loan is the offered to the credit card holder. You need to the pay back loan quantum in the future by the due date. 


What's Personal Loan? 



Personal Loan is loan given to the existent grounded on the credit history, income, and prepayment capacity. Prepayment in the case of the particular loan is bt the fixed quantum investiture over a fixed term. 



How to Select between the Credit Card Loan and Personal Loan? 

 

It's delicate to make a choice between the credit card loan and particular loan as both of them sounds analogous. Still, following points will a  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 Personal loan requires quite a number of the documents for the blessing and takes a many days to the come through, still loan on the credit card does not need any attestation and is the briskly to attain. 
  • Interest This is the most important point to be considered while the taking a loan. Generally, person loans are offered at a 13-22 interest rate, while the credit card loans offer interest rate of the 10-18. Still, another crucial factor is that credit card loans can be a profited at flat interest rates, while particular loans are the available with the reducing balance rates.  Monthly interest in the case of flat rate loans is applied on the original loan quantum and it remains the same for the entire duration of the term, indeed though the top quantum diminishments. While in case of the reducing balance loan, the interest exodus decreases as and when the star is paid. 
  • Unsecured Loan  Still, both these loans are the relaxed and there is no collateral involved. 
  • Tenure Credit card loans can be a taken for the lower term ages, while Personal loans are a generally long duration loans. 
  • Loan Amount  A credit card loan is a suitable option when in the need of a small quantum of the loan, while with particular loans, you can be mileage a huge loan. 


After the comparing both loans, you can make a choice grounded on your fiscal need, time frame for a which you need the loan and how soon you need it.However, it is easier for you to make the right choice, If you are clear about your demand. 

  • Operation Process – Operation process in the both loan is a different. Credit card loan is obtainable fluently. You just need to walk into your bank and conclude for this loan. In case of the Particular loan you need to the submit form 16, bank statement, income evidence and KYC document for a loan operation. Processing time in the case of particular loan is longer compare to credit card loans. 
  • Processing figure and pre check charges – Processing figure in both particular loan and credit card loan are same. It is  generally in the range of the 0.5-1. The pre check charges in a both cases would be in the range of the 2-5. In credit card loan you can lower the term of a loan by the making pre-payment. Still, the particular loan comes with a fixed duration of the 12-24 months. 
  •  Loan Quantum – A Personal loan is more suitable for a advanced quantum. If you are  looking for the small quantum credit card loan could be a suitable option. In this loan you will get amount up to the your credit limit. 
  • Interest Rate – Interest rate plays a pivotal part in the comparison. A Personal loan is a offered at the interest rate of the 13-22, still, credit card loans are offered at the 12-15. The rate of interest depends upon a bank. Particular loans are the offered in two variant flat and reducing balance rate. In flat rate, interest quantum is a calculated flat on a entire star. On the other hand, in reducing balance rate interest quantum will be calculated on the reduced star. 


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