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Wednesday, March 23, 2022

what is better credit card or personal loan ?

what is better credit card or personal loan ?

Credit Card Loan Vs Personal Loan

What is your plan of action when you are in need of some cash  and you do not have sufficient funds? You may either opt to swipe your credit card with the traditional way of taking  loan. You have two option, either take a loan on your credit card or take  personal loan . To make a choice between the two, you will have to draw a 


Personal Loan

Personal loan is usually  unsecured loan taken for various purpose ranging from medical reason to expensive purchases to a vacation even debt consolidation. The interest charged  personal loan is high as they are unsecured loan.

Credit Card Loan

Loan on credit card is a-approved loan that does not require any documentation. It is the fastest to attain unsecured credit. In this type of loan,  certain part of your credit card limit that is  is offered as a loan. Loan on credit card   same as cash withdrawal.

Credit Card Vs Personal Loan

Personal loan and   credit card seem similar but are  exactly the same.

Documentation: A personal loan requires quite a number of document for approval and takes a few day to come through, however loan on credit card does not need any documentation and is  to attain.Interest: This  the most important point to be  rate of 10-18%. However, another key factor is that credit card loans can be availed at flat interest rate, while personal loans are available with reducing balance rate.Monthly interest case of flat rate loan is applied on the initial loan amount and it remain the same for the entire duration of the tenure, even though the principal amount decrease. While in case of reducing  loan, the interest outflow decreases  and when the principal is paid.

Unsecured Loan: However, both these loan  unsecured and there is no collateral involved.Tenure: Credit card loan can be taken for lower tenure periods, while personal  are usually long duration loan.Loan Amount: A credit card loan is a suitable option when in need of a small amount of loan, while with personal loan, you can avail  huge loan.After comparing both loan you can make a choice based on your financial need, time frame  which you need the loan and how soon you need it. you are about your requirement, it is easier for you to make  right choice.

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Credit Card Vs Personal Loan FAQs

Is a loan on credit card considered  term loan?

When you take  loan against  credit card, this is an unsecured loan. It is  similar to same  cash loan. A credit card on the other hand is a payment card  is issued by banks  allow you to buy for things  and online. You can use  card for cash withdrawal and balance transfer  well.

Will personal loan affect my credit score?

Taking a personal loan can actually improve your credit score when it comes to the long term if you make timely and consistent repayment  debt. Late payment can damage your score when they are reported   credit bureau.

Which is considered better,  card or a personal loan?

This depends  need. If you require cash, personal loan and  credit card would  the right choice. A credit card is better for a short-term debt, and a personal loan  perfect those who require time  repayment.

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