Personal Loan Vs Credit Card

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Personal Loan Vs Credit Card - Which is the Best
for You?

• Know about these things
• Credit Score
• How much cash you want to borrow?
• How long will you take to repay it?

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How does credit card work?

• Unsecured Credit Cards Credit card offers you a
  line of credit that is used for daily purchases,
  and monthly bill payment without any security.
  Many credit cards come with rewards, such as a
  discount on retail shopping, bonus points on
  travel and dining, and cash back at the gas
  station, grocery stores, restaurants, etc. The
  typical rewards range from 1 to 2 of what do
  you spend. When you are using a credit card, you
  will need to make at least the minimum payment
  every month by the due date.

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Secured Credit Cards   There are usually
unsecured credit cards available but you can take
the secured credit cards also. Secured payment
used as collateral on the account back up these
secured credit cards. These secured credit cards
are backed by the secured payment used as
collateral on the account. There are
several benefits of secured credit card, and they
are as If you dont qualify for an unsecured
credit card, secured card can be a good option as
you look to improve your credit score. You can
make emergency purchases which might not be
possible with unsecured ones. Secured credit
cards are available for lower fees than unsecured
credit cards Many of the lenders provide the
interest on the security deposits also. Easier
approval than most desirable unsecured cards.
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How does a personal loan work?

• A personal loan is the type of unsecured loan
  (signature loan) which helps you meet your
  current financial needs without any security. It
  is given on borrowers credit card history and
  their capability to return the money from their
  personal income at a fixed interval of time. If
  you have a good credit score, you can get the
  personal loan in a couple of days. Personal loans
  nowadays are planned in such a way that it will
  be budget friendly. You can get them at the fixed
  interest rate and for the fixed monthly
  installments. The rates of interest are subjected
  to vary from lender to lender.

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Difference between Personal loan and credit card
S. No Personal loan Credit Card
1 You cannot increase your loan amount once it gets sanctioned. You can take as much loan until your card limit is maxed out
2 Borrowing limit can be up to 100,000 Borrowing limit can be high as 50,000
3 The interest rate is fixed according to individual financial firms. The interest rates are variable.
4 Lower interest rate Interest rates are usually higher than personal loans.
5 Funds disbursement will be lump sum upon approval. Funds can be taken out at any time according to your need. (Cash advances are also available).
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Pros and Cons of Personal loan

• Pros
• There is no restriction as to what the loan
  amount can be used for. You can use your personal
  loan for your personal expenditure.
• It will come with lower interest rates as
  compared to credit cards, i.e. low.
• If you have good credit card score, you can
  borrow up to 100,000.
• Affordable monthly repayments according to your
  convenience.
• Good for long-term purposes

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Cons The minimum loan period means that you
have to carry the debt for minimum one year or
more. It will take minimum two to three days
for process. Includes documentation. In some
cases, payments are inflexible (which means you
cannot pay before the fixed period).
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Pros and Cons of Credit Cards

• Pros
• You can use the credit card for immediate
  purchase according to your need.
• Credit cards come along with specific rewards
  points depending on financial firms.
• It is a convenient option if you need a constant
  cash flow.
• No need to undergo unnecessary documentation.
• Interest- free grace period is available.
• The credit amount is transferred at any time.
• Good for short-term purchases.

• Cons
• A credit card usually carries higher interest
  rates.
• Revolving credit makes it easy to spend beyond
  your limits.
• If you need the cash advance, typically you
  should pay two to four percent.

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Personal Loan Calculator

• Start the calculator by entering the amount how
  much you want to borrow. Then follow the steps
• Enter the loan amount and your payback period in
  years or months.
• Calculate the ideal interest rate on your loan
  amount.
• Finally, you can see how much you need to pay as
  principal and interest.
• Once you have stimulated different scenarios with
  the personal loan calculator, compare your best
  loan offers from various lenders.

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Read More
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THANKS