Depending on the type of urgency and requirement, one can opt to take a credit card loan or a personal loan. But what is the difference between a credit card loan and a personal loan? Read along to know more.
Difference Between A Personal Loan And A Credit Card Loan
Credit Card Loan
You can apply via Money View if you want a good rate of interest. You can also apply from a bank.
You can accept the pre-approved offers on your credit card or you can apply for a loan via the respective bank.
Depends on the income and is calculated by the lender.
Depends on the pre-approved limit which is set by the lender.
In Money View, the rate of interest starts from 1.33% per month. This can change depending on your credit score, financial behavior, and so on. It can go up to 20%.
Usually higher than personal loans. It can increase up to 29%.
ID proof, address proof, income proof
No documents required.
A personal loan is an unsecured loan that is provided by a bank. You can get a personal loan instantly as you will not have to submit a lot of documents. Such a type of loan is provided without any security or collateral. As a result, the rate of interest charged by the bank, which is providing you the loan, could be sometimes slightly higher than an auto loan or a home loan.
You can take a personal loan for various reasons such as wedding expenses, medical emergencies, urgent foreign travels, and so on. You can repay the loan amount during the repayment tenure in monthly installments. Personal loans are usually easy to avail, as the process is not tedious. So, if you have an urgent situation at hand and you need a substantial amount of money to handle the situation smoothly, then you can opt for an instant personal loan. However, to get a personal loan without any complication, you must have a high CIBIL score (700 and above) and a good history of loan repayment (if any).
If you want to take a personal loan with a reasonable rate of interest and a convenient EMI plan, then Money View can help you with it. At Money View, we offer personal loans without charging hefty interest rates. Also, your bank account will be credited with the loan money instantly and without you having to submit a lot of documents. However, you will have to submit your ID proof, address proof, bank statement (for salaried individuals), and IT returns (for self-employed individuals).
Personal Loan Eligibility Common Factors
Must be between 21 to 68 years of age. The older age may vary from bank to bank.
Must have a stable monthly income.
A good credit score.
Work experience of 1 to 3 years and above.
The eligibility can vary from lender to lender.
Benefits of A Personal Loan
There is no fixed limit that is set on the loan quantum. You can ask for a sum as per your requirement.
No security or collateral is required.
Flexible repayment tenure
A credit card loan is a pre-approved loan or a pre-qualified loan that is easily credited to your bank account without any delay. All credit cards have a credit limit. A credit card loan amount is set against the credit limit. The unutilized amount of your credit limit is given as the loan amount.
This loan amount is credited to your bank account after the bank approves your request. It is also sometimes given in the form of a demand draft. You can choose in which form you want the amount to be credited. To get your loan approved, you do not have to submit any document. Such loans also do not have extremely high rates of interest. And, like other types of loans, you can repay your credit card loan in monthly EMIs.
Credit Card Loan Eligibility Common Factors
You must have a credit card to apply for this loan.
A good credit score and history.
The loan amount is based on your credit limit. The credit limit is decided as per your income and financial history.
Should I Opt For a Personal Loan Or A Credit Card Loan?
You can avail of a personal loan if your requirement is for a large expense and you are willing to pay for it in EMIs over an extended period of time. For example, if you want a large sum of money for a family wedding, then you can opt for a personal loan.
You can take a credit card loan if you know that you can pay off the amount quickly as compared to a personal loan. For example, if you want an additional amount of money to purchase furnishing products for your home, then you can opt for a credit card loan.
Check the following to know more:
When To Apply For A Personal Loan
You want a longer repayment tenure.
To pay off another loan using the amount from the personal loan at a lower rate of interest. This is also known as Debt-Consolidation.
You want a loan amount that is more than your credit card limit
When To Apply For A Credit Card Loan
Your expense is not exceeding your credit limit.
When your requirement is immediate.
Better interest rate compared to a Personal Loan.
Your eligibility does not match with the requirements needed for a Personal Loan.
The answer depends on your requirements. If your requirement is not major, then you can opt for a credit card loan and repay it within a short tenure. If you need a sum of money that is higher than your credit card limit, then you can opt for a personal loan.
A credit limit is a maximum amount that is fixed by your bank for your credit card. For example, if your credit card limit is INR 50,000, then you won’t be able to spend more than the specified amount by using your credit card.