Confused between a personal loan and a credit card? Can’t figure out which of the two makes a more suitable funding source?
Both credit card and personal loan meet different funding requirements and have different merits in different situations, but we recommend using a credit card. Here’s why:
1] Approvals are Easier
When it comes to availing credit, the simplicity of the application process and the ease of approval that accompany a credit card, make the balance tilt in the favour of credit cards.
2] The Borrowing Limit is Relatively Lower
With a credit card, you can borrow an amount as small as Rs. 3000 but with a personal loan your approved amount is relatively bigger and once it is disbursed, you start paying interest on the entire amount from Day 1, regardless of how much you actually use. Also, with a credit card, your repayment amount can be easily converted into affordable EMIs.
3] Interest is Charged on the Amount You Use
A credit card is your best bet if you need a short-term loan for 6 months because you are charged interest only on the amount you actually spend. Why should you burden yourself with long-term interest if you can be free of debt quickly with a credit card?
Also, personal loans are offered for a minimum of 1-2 years so if you have sufficient cash flow and are confident of repaying on time, opting for a credit card makes a wise decision.
4] Attractive Rewards and Benefits
You can enjoy a plethora of benefits every time you swipe your credit card. From reward points and travel benefits to discounts, cash back and insurance coverage – all of this along with an interest free credit period for up to 45 days in most cases.
5] Flexible Repayment Options
While personal loans come with fixed repayment schedules of equated monthly installments, credit cards come without any predetermined repayment tenure or an end date. So, if you are unsure of your repayment ability within a specific timeframe, then you should definitely choose a credit card over a personal loan.
The Final Verdict
If you want to enjoy the pros of both personal loans and credit cards without their limitations, apply for MoneyTap’s personal line of credit which can be used as both a credit card and an instant loan. Download their money loan app here.
With MoneyTap’s line of credit, you get instant access to money which you can spend as and when you need and pay interest only on the amount you withdraw or swipe. With MoneyTap you can get approved for an instant loan of up to 5 lakh rupees and convert your repayment amount into affordable EMIs of your choice.
Its built-in-flexibility also lets you determine your repayment tenure anywhere between 2 months to 36 months.
Also, since MoneyTap’s line of credit is a revolving account, every time you repay your borrowed amount, your available balance gets recharged by the same amount so you will never run out of funds as long as you are regular with your monthly repayments.
Whether you need some extra cash to cover last minute wedding expenses or need a loan for buying a used car, MoneyTap’s line of credit is a clear winner with the combined benefits of an instant loan and credit card.