Credit Card Loan vs Personal Loan: Understanding Key Features

Loans on Credit Cards and Personal Loans are two convenient choices for people looking for funds urgently. While both options provide quick access to funds, they differ in terms of interest rates, repayment flexibility and borrowing limits. Read this blog post to learn about Personal Loan and Credit Card Loan and find out which option suits your financial needs better.

Credit Card Loan

Credit Card Loan is a loan that is availed against an active Credit Card. It can be within or over your current credit limit.

Advantages of Taking a Loan on a Credit Card

The reasons that make this loan a good option are:

Advantages of taking a loan on a Credit Card

• No Collateral Required

Customers do not need to pledge any collateral like property or shares while taking a loan on a Credit Card. This makes it easier for them to avail the loan, without much delay and stress.

• Instant Access to Funds

The main reason for taking a loan on a Credit Card is quick approval. Customers thus get immediate access to money, without the trouble of lengthy approval processes and a pile of paperwork.

• Flexible Repayment Options

Customers can choose to repay the Credit Card Loan in regular payouts called EMIs. EMIs help you handle your finances better and enable you to repay the loan in convenient instalments over time.

Personal Loan

A Personal Loan is an unsecured loan that does not need collateral or security. These loans can be used for various purposes like home renovation, education, a vacation or purchasing a gadget.

Advantages of Taking a Personal Loan

The reasons that make this type of loan a worthwhile decision:

• High Loan Amounts

You can borrow up to ₹ 50 lakh* to fund significant expenses like home upgrades, expansion of your business or even pursuing higher education. Higher loan amounts enable you to fulfil your obligations without sacrificing your aspirations.

• Digital Application

Applying for a Personal Loan has become easy thanks to a fully digital application process. You can easily apply for a loan online, track its progress and handle repayments, all from the comfort of your home.

• Easy Repayment

Repaying a Personal Loan can be easy with flexible repayment choices. You have the freedom to select a loan tenure (duration) ranging from 1 year to 6 years based on your preferences and needs. You can opt for a short-term loan for swift debt settlement or a longer one for more manageable monthly payments.

Comparing Credit Card Loans vs Personal Loans

Here’s an overview of Credit Card Loans vs Personal Loans:-

Conclusion

Credit Card Loans are perfect for smaller, urgent expenses since they are approved quickly and require little verification. Personal Loans, on the other hand, provide higher loan amounts, lower interest rates and longer payback terms, making them more suitable for planned expenses.  Consider aspects such as interest rates, loan duration and total expenditure before making a decision.

*Terms and conditions apply.