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Credit Card Loan Vs Personal Loan

What is your go-to option when you require money and you run out of liquid funds? You may choose to use your credit card or take a personal loan. Whichever you opt from, personal loan or credit card, both make the cash available instantly. What is the difference between a personal loan and a credit card? A credit card loan is favourable for short-term debt, and a personal loan is for those who need a debt with longer repayment tenure. It is termed a revolving debt since the amount available for borrowing depends on the amount left on your card at the end of your billing cycle.

 

Are personal loans better than credit cards? A personal loan is an unsecured loan taken for different purposes and is charged with high-interest rates. A credit card loan is a pre-approved loan and is the fastest way to attain unsecured credit without any documentation. Be it a personal loan or a credit card loan; your first task is to find out the lowest cost option that caters to your needs. Since both these loans are unsecured, we shall take a look at the interest rates first. 

 

Generally, personal loans can be availed at an interest rate of 13-36%, while credit card loans are offered at an interest rate of 10-18%. But, an important point to be noted is that credit card loans are available at flat interest rates. On the other hand, personal loans are offered with reducing balance rates. The chances of fast approval of a personal loan are higher for a salaried employee than a self-employed person. 

What are the pros and cons of a personal loan?

PROS

CONS

It is ideal if there is a need for a huge amount and some amount in liquid form.

Interest rates range from 13-36%, depending on the lender. 

The eligibility criteria for a personal loan is less stringent.

It requires several documents for approval and takes a few days to process.

To consolidate debt with a low-interest rate, you can choose to avail of a personal loan.

You are restricted to a fixed repayment amount and schedule.

You can apply for a personal loan both online and offline.

To get a low-interest rate, your credit score should be good.

The amount will be credited to your account in less than one hour if all the documents are verified on time.

Additional processing fees may be charged.

What are the pros and cons of a credit card loan?

PROS

CONS

You can apply for it anytime without any tedious documentation procedures.

The interest rate can be very high depending on your card’s APR (Annual Percentage Rate).

Interest rates range from 10-18%, which is low compared to personal loans.

Fees like annual fees, late fees, over-the-limit fees may be applied.

Anyone with a good credit rating can avail of a credit card loan.

To apply for a credit card loan with the lowest interest rates, your CIBIL scores must be above 700.

No need for a physical visit to a bank to apply for a loan.

Not ideal if you need liquid cash as you may need to pay charges as withdrawal fees.

Certain selected cards offer to transfer balance at times with a 0% interest rate and repayment tenure of 12-21 months.

 

 

A Personal Loan or Credit Card Loan - Which is better?

When you consider every factor, both credit card loans and personal loans are all the same. 

 

It depends majorly on the perspective, needs and the time of need. The difference between personal loans and credit cards that matters the most is the interest rates charged for the loans. 

 

A credit card loan is a better option when you need small loans for a short tenure. It is an instant funding option as it is credited against the unutilised credit amount on your card. The interest rates are comparatively low, and more than anything, you don’t have to run between several government offices to collect all your documents, as in the case of personal loans. 

How can you avail a credit card?

It is essential to choose the right credit card if you are going to avail yourself of one. Bajaj Markets offers you a wide range of credit cards and suggests the ideal one when you fill in the details. Choosing a credit card from the options offered by Bajaj Markets benefits you in various ways, including:

  • Instant approval with few documents and simple eligibility criteria.

  • You can easily fulfil your immediate cash requirements with zero interest on ATM withdrawals for up to 50 days.

  • Avail credit card loans for 90 days with a nominal interest rate of 1.16% per month and zero processing fee.

  • Enjoy membership privileges and earn rewards which can be used to avail discounts, cashback, etc.

  • Effortlessly convert your purchases above Rs.3000 into affordable EMIs.

Apply for a credit card on Bajaj Markets

Bajaj Markets offers various credit cards, including exclusive SuperCard variants. You can choose from them based on your lifestyle. It is easy to apply for a credit card on Bajaj Markets. Simply follow these five steps to get a credit card of your own.

  • Fill up the online credit card application form.

  • Proceed by validating the details provided with an OTP.

  • After verification, you can view your pre-approved offer provided by Bajaj Markets.

  • Choose your credit card from the given options according to your spending habit.

  • Once you select the card, you will get your instant pre-approval, and you will receive your card shortly.

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