If you are also thinking of taking a personal loan, then first know which will be better for you between a credit card and a personal loan. In a personal loan offer, you get pre-approval. Which is like an instant loan. A credit card can be very useful in times of emergency. Using a credit card during an emergency makes you worry about paying lakhs of rupees in lump sum at that time.
At the same time, you can easily repay the payment made through credit card later. At the same time, this money can be used in many ways by taking a personal loan. But it may take time to get a personal loan. In simple words, instant loan cannot be used in case of emergency. Here you can know the difference between a personal loan and a credit card and their different uses.
Which Is Better To Choose Credit Cards and Personal Loans?
Both credit card and personal loan come under the unsecured category. If you want to balance your credit score, you will have to take both secured and unsecured loans. Only then can you balance your credit score.
Interest Rate Of Credit Cards and Personal Loans
The use of credit cards has also increased rapidly in the recent times because you get a grace period of some time to repay the loan. If the loan is repaid in this grace period, then the loan amount can be returned without interest. You do not get this option with personal loans. After taking a personal loan, you have to pay EMI along with interest from the next month itself.
How To Take Credit Cards and Personal Loans
To take a personal loan, you have to give some important documents to the bank. The parameters of your salary etc. are checked. Only after this your loan is approved. Whereas there is no need for too many formalities for a credit card.
Reward Points And Discounts Are Not Available On Personal Loans
On using a credit card, you get the benefits of reward points, gift cards, vouchers, discounts and cashback. But you do not get such offers in personal loans.
Rules for Closing Personal Loan Are Also Different
You can repay the credit card amount in one go during the grace period. Apart from this, if the credit card loan amount is high, then you also get the option to convert it into EMI. However, for this you have to pay many charges like processing fee, prepayment charge and GST. But personal loan cannot be closed by paying a lump sum amount before a certain period. If you do this, then many banks charge a penalty for this.
How To Understand When It Is Use Credit Card And Personal Loan
Along with this, which of these two is better for you also depends on your needs. If you want a lump sum amount, then personal loan is a better option. On the other hand, if you need money for small expenses and also want the reward points available in a credit card, then a credit card will be the right option. So if you need a large amount and cannot arrange money from anywhere, it is wise to choose a personal loan instead of a credit card. In this, you get more time to repay the loan. This also makes the EMI smaller and you can repay it easily.
Conclusion
It is wise to use a credit card at many places, but in many cases, it is better to fulfill your need of money in case of emergency by taking a personal loan instead of a credit card. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
