The advice we always got from our elders is ‘Spend Frugally, Save Money For A Better Future. But that’s not always possible. When you require liquid funds, you can go for a personal loan or opt for a credit card. And you have to decide which one is better for your financial journey. personal loan vs. credit card – Both options can help you get the money when any financial shortcoming arises or for meeting sudden, planned, or unexpected expenses but under different terms. After evaluating your financial situation, you have to check which option you should go for. To choose between the two, go through this article that will help you understand the differences between credit cards and personal loans and their various features. In this way, you can pick the right debt instrument that will suit you and your financial situation.
Features of A Credit Card
Credit cards are probably the handiest debt instrument that comes with flexibility and ultimate convenience. Don’t have money in your account? No worry because credit cards will help you out at that moment. Even The option of ‘buy now, pay later’ makes credit cards extremely worthy among the consumers. When you are looking for a cashless transaction, a credit card is the safest option to go for. It is like a pre-approved loan that comes with a limit and does not require any documentation. You can use this card in need of small and big-ticket purchases or in time of emergency.
Credit Card Benefits
- You can apply for a credit card loan any time you want without any additional documentation
- You don’t have to visit a bank or stand in a queue to apply for a credit card. Now you can apply online and a representative will come to you to fulfill the formalities
- Having a good credit score report i.e. 700+ brings added benefit as approval becomes easier for individuals
- You can repay your credit card bill after 28-30 days. And it’s not necessary to pay the entire amount on the due date, you can pay the minimum as well
- You can withdraw cash using a credit card but the interest rate can be heavy on you
How Do Credit Cards Work?
When you need cash, credit cards are an easy and convenient way to pay for it. You can use it until you exhaust the remaining balance. And you need to pay the bill within 1 month from the day of purchase. Meanwhile, you can keep spending till your credit limit is exhausted. And you will receive the bill in the following month. However, the interest rate may vary depending on the card’s annual percentage rate. A secured credit card doesn’t ask for any collateral. There are multiple benefits of using a credit card, but it has some drawbacks too. For example, credit cards come with annual fees, late fees, and over-the-limit fees, even overspending may let you pay a heavy price. And if you don’t pay on the due date, it may affect your credit score. So, use your credit card smartly and whenever required. If you are in urgent need of cash and you know that you can pay off within the time, then only use it. But make sure you keep a track of the uses, billing date, and pay timely. This will keep you away from future hassle while making your financial journey smooth and hassle-free.
Personal Loan Over Credit card? Yes Or No?
When we talk about personal loans, the one thing that comes to mind is that it is unsecured and does not require any collateral. Depending on various factors like eligibility, income, credit score, the interest rate and tenure period may vary. With Buddy Loan, you can choose a loan amount ranging from Rs. 10,000 to Rs. 15 Lakh at a lower interest rate starting from 11.99% p.a. With minimal documentation. You can select the tenure period as per your choice that is from 6 months to 5 years.
You can use a personal loan for any purpose. Be it for traveling, purchasing a dream vehicle, higher education, medical emergency or to fulfill the expenses for a wedding, you can use it for your needs. If you are facing any cash crunch, you can apply for a personal loan online and get a customized loan disbursal within 48 hours. To avail of a personal loan, you have to be a citizen of India, the age should be between 21 to 60 years, and earnings should be more than Rs. 18000. Make sure you have these documents before you apply – PAN card, Aadhar card, Voter ID for address proof, passport, salary slips, and bank statement. Depending on the lender, the documents may vary.
Once the documents are verified, the loan will be disbursed to your account instantly. As per your convenience, choose the repayment tenure and pay it without giving yourself a burden. The best thing with Buddy Loans is that there are no hidden charges or processing fees, everything is safe and transparent.
Personal Loan Benefits
- The eligibility criteria for quick personal loans are less strict compared to a credit card
- For consolidating your debt at a low interest rate, personal loans are best
- If you are looking for a longer repayment period, then go for a personal loan
- When you need a huge amount of money to pay for several things, a personal loan is a great way
Personal Loan Vs. Credit Card: Which One To Choose?
Personal loan vs. credit card – both have their unique features, benefits, and drawbacks as well. From an overall perspective, they work almost the same. But in terms of interest rate and repayment options, personal loans are more beneficial than credit cards. The interest rate for a personal loan is lower than a credit card and you can choose the repayment tenure as per the flexibility. You can get a loan to pay off all your existing debts or dues. While credit cards act as a portable financial support system. No matter what the uninvited expenses come, you can use both options.
So whenever the comparison comes, which one is better – personal loan vs. credit card? The answer depends on your requirements and the circumstances. Choose your option carefully so that it doesn’t affect your financial health!