Loan Tips: Credit card loan or personal loan in case of emergency; Which is the best option?
Credit Card Loan vs Personal Loan: When it comes to loans, it varies from person to person and from bank to bank. The type of loan you should take depends on your individual needs.
Both credit card loan and personal loan have their own advantages and disadvantages. So let us know what is the difference between these two loans and which is the best loan option for you in an emergency situation.
What is a credit card loan?
A loan against a credit card is a pre-approved loan given considering your credit card usage, repayment, and history.
With a credit card, you can take a loan quickly and easily which can help you in your emergency. The interest rate on a credit card loan is generally higher than that of a personal loan.
What is a personal loan?
A personal loan is an unsecured loan that banks or NBFCs provide to customers. This loan is given on the basis of your credit history, credit score, your employment history, repayment capacity, income level, and profession.
You can use a personal loan for any purpose. Using this money you can handle any emergency.
What is the difference between the two?
Loan against a credit card is not given to every credit card holder. This loan is given only to selected users. Whereas any customer can take a personal loan even if he is not a customer of that bank.
You can avail a credit card loan by accepting or applying for a pre-approved offer from your bank. To take a personal loan, you can apply to any bank or financial institution along with your documents.
The loan amount received through a credit card will come directly into your bank's savings or current account if you have an account in that bank. Apart from this, loans can also be availed through cheques. Whereas the personal loan is paid in a lump sum into the savings/current account of the customer or through a cheque.
You get a credit card loan within 24 hours, whereas a personal loan takes 3 to 5 days.
Repayment of credit card loan will be added to your credit card statement every month for the said period. Whereas personal loan repayment has to be done as per the EMI prescribed by the bank.
Which is better in an emergency?
In an emergency, that money is most useful and is available as soon as possible. Accordingly, taking a loan from a credit card can be a good option, although this loan is given only to selected customers. If you need a large loan amount then you can take a personal loan.