Personal Loan or Credit Card Loan

Personal Loan or Credit Card Loan - Which One Should You Take?

March 19, 2022 • 6650 views

Personal loans and credit loans are both used to get funds from lenders. But both can be used under different terms based on financial goals. Keep reading to understand the key differences between a Personal Loan and credit card loan and which one to choose.

What is a Personal Loan?

A Personal Loan is an unsecured loan you can use to cover any personal expenses. These expenses may include home renovation, funding a wedding, covering higher education costs, etc. 

What is a Credit Card Loan?

A credit card loan or a loan against a credit card is a financing option that allows you to borrow money from your credit card limit. You repay the borrowed amount in instalments with interest. However, this credit line often comes with higher interest rates than a Personal Loan.

Personal Loan Vs Credit Card: Key Differences

Here are the key differences between a Personal Loan and credit card loan:

Points of Distinction

Personal Loan

Credit card loan

Best For

Large, one-time expenses

Daily Expenses

Interest Rates

Fixed

Variable

Nature of Credit

An unsecured financing option that provides substantial funds upfront and is repaid in fixed instalments over a specified period.

A revolving line of credit that allows users to borrow funds from their allotted credit limit and repay them over time or in full each month.

Usage Flexibility

You can cover major purchases including home renovation, debt consolidation, funding a wedding, etc.

You can cover day-to-day expenses, online shopping, and emergencies.

Offered Loan Amount

You can secure a loan amount of up to ?30 Lakh.

The loan amount is limited to a portion of your credit limit.

Personal Loan vs Credit Card Loan - Which One is Better?

Determining whether a Personal Loan or credit card loan is better depends on various factors such as financial situation, needs, and borrowing habits. Personal Loan offers high loan amounts and flexible tenure, while credit card loan offers the convenience of paying for expenses and paying bills later.

Advantages of a Personal Loan 

The following are the benefits of availing a Personal Loan: 
1.    Higher Loan Amount and Usage Flexibility 
2.    Flexible Repayment
3.    Lower Interest Rates

Advantages of Credit Card Loan

The points below highlight the benefits of using credit card loans: 
1.    Streamlines Daily Expenses 
2.    Revolving Credit
3.    Builds Credit History

ALSO READ :- What Are the Best Reasons to Apply for A Personal Loan?

How to Apply for a Credit Card Loan?

Follow the steps below to apply for a loan against a credit card online:

  • Step 1: Check your eligibility and inquire about options.
  • Step 2: Submit all the necessary documents.
  • Step 3: Choose the repayment tenure and loan amount as per eligibility. 
  • Step 4: Confirm the terms and conditions.

After successful verification, you can withdraw the amount from your credit card.

How to Apply for a Personal Loan with Poonawalla Fincorp?

Here are the steps to apply for a Personal Loan with Poonawalla Fincorp:

  • Step 1: Click on "Apply Now".
  • Step 2: Fill out the application form.
  • Step 3: Upload all necessary documents.

Upon verification, the loan amount will be credited to your bank account.

To Conclude 

A Personal Loan offers funds for unexpected expenses requiring significant amounts. It provides repayment flexibility and lower interest rates. Credit card loans provide usage flexibility for everyday spending and emergencies. They also help you build credit history. To make an informed borrowing decision about a Personal Loan vs. credit card loan, you must consider your financial goals, borrowing needs, and repayment capacity. 
If you are looking for quick funding option or want to consolidate high-interest debt, you can avail of a Personal Loan with Poonawalla Fincorp at competitive interest rates.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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