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Credit card Vs Personal loan The better recourse?

Credit card Vs Personal loan The better recourse?

posted on 2018-12-12 09:25:10 by Admin

In need of sudden cash? Feeling apprehensive to ask your acquaintances? Or confused whether to go for credit card or whether to apply for a personal loan for your emergency? Feeling demented? No problem, let’s clear out your confusion.

How does credit card and personal loan works?

Credit card is an easy access of having cash in emergency. As it comes with a certain limit which is provided by the bank. It is also one of the highest interest rate products, but again it is best for the short term financing. The main principle of credit card is that how much you end up paying every month and how much you are able to repay it back on time. In Order to get aid from the extra interest charges try to repay the amount as soon as possible in order to avoid penalty. You also get many rewards by using credit cards in specific stores. Credit card is also like an ongoing credit.

Personal loans, on the other side are an unsecured debt, which is also without any collateral. This comes with a longer tenure of repayment time and also the loan amount can be higher than what do you get in the credit card limit. It is provided by various banks and NBFCs. These usually come with a lower interest rate, lower than the credit card. This is depended upon your credit score also and the loan amount is divided into monthly EMI’s, which you need to pay every month. Personal loan comes with an end date.

Credit card or personal loan, which is more beneficial?

Credit cards are amazing source for short term usage like buying some gift or buying some clothes, but in need of medical emergency or planning a wedding, personal loan is all you got. As compare to credit cards in which the interest rates are higher, personal loan comes with a lower rate of interest. Both credit card and personal loans are important in one way or the other. For short term or for short financing credit cards get a win-win offer, but for long term and for something big personal loan takes a major shot.