In regular life, people often face certain financial emergencies. In these situations, he needs a lump sum amount which he can’t afford. This is the time when a person thinks of taking a loan. There are different types of loans available in the market that can provide instant cash.
Here, you will be able to know about the details of the credit card loan and the personal loan. A detailed comparative study for both along with the definition is given below, which can help you to form the right decision when selecting one.
Credit card loan
The credit card issuer provides a credit card loan. It is the money that a credit card issuer can withdraw with the help of a credit card. One can withdraw an amount that is anything less than the credit limit. Credit card loans are generally available in two types, such as secured and unsecured. For the secured credit card loans, you have to provide a security amount which is needless for the unsecured variant.
A personal loan is a primary variant of loan that is available in the market. Any lender can give a personal loan to the seekers who have a decent and stable income and a good credit score. Users can take personal loans for any purpose. There will be no restrictions from the lender. The interest rate of personal loans is high, as it is an unsecured loan.
Comparative study of credit card loan and personal loans
The primary thing you need to consider is the convenience of taking either of the two types of loans mentioned above. Personal loans can prove to be more convenient as taking it will not affect your credit score negatively.
On the other hand, taking the credit card loan can instantly result in a sharp downfall of your credit score. It is because the credit issuer does not see it as a good move. Your creditworthiness might stand in front of a big question if you withdraw a large amount of cash from a credit card.
Process of application
The process of application in case of a personal loan is easier than a credit card loan. For applying to get a personal loan, you will have to produce all the necessary documents to the bank executive. Expect that your personal loan will be sanctioned within a few hours of application if all your documents are authentic, and you can meet the eligibility criteria of the bank.
Conditions are different in the case of a credit card loan. You have to apply for the loan to your credit card issuer. The sanctioning might take a few days. Moreover, you might face a lot of inquiries from the lender’s side.
Rate of interest
The rate of interest for a personal loan is always fixed. However, for credit card loans, the interest rates may continue to increase with time. So, it is safer for the loan seeker to handle a personal loan than to process a credit card loan.
Apart from the above facts, there are other factors like the tenure and the repayment structure, which differs in the case of both. In basic terms, taking a personal loan can be considered as a safer option. However, one can also consider apply for credit card loans if he can repay it following the norms specified by the issuer.