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Credit Cards Versus Personal Loans
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When you find yourself in need of urgent cash for an emergency situation, you have several options which you can avail. However with the several options come several advantages and disadvantages along with it. In this article, we highlight the difference between of credit cards and personal loans and the benefits which include rewards points and personal loan interest rates, etc.
A personal loan and credit card gives you the funds at will. However, the advantage is that personal loan interest rates are much lower than credit cards. When you sign for a personal loan, the interest rates are fixed for the entire repayment tenure, and therefore it will not fluctuate. Using a personal loan EMI calculator, you can finalize on the affordable interest rate, repayment tenure and EMI to suit your monthly cash flow. Comparatively, the personal loan interest rate is substantially lower than the interest rates on credit card debts. With a credit card, your payment tenure and interest rates will tend to fluctuate and the banking institute will have the first say in the repayment tenure, EMI and the interest rate.
The application process for the credit card is not as long as the application process for the personal loan. While you will need to submit secondary essential documents when you are applying for a personal loan, you can avail the credit card debt by withdrawing the funds from the nearest ATM with your credit card. Also the processing time for the personal loan and the credit card is different. The personal loan may be the quickest loan application, but compared to the credit card, it takes longer. The credit card application takes a mere few days, after the document submission, but the once you own a credit card, you can avail the debt anytime you like. On the other hand, the personal loan will only be accepted if the all the documents are verified and your repayment ability is established. There is also a slight chance that your personal loan application may be denied due reasons like credit history.
Monthly payments are different
The repayment tenures are different for the personal loan as well as the credit card. While the personal loan involves sticking to a monthly budget which is easier for most individuals with a fixed income, repayment for a credit card is very tricky. With a personal loan EMI calculator, you can decide the personal loan interest rate, EMI and the duration of payments as per your convenience. However, with a credit card, you do not have that privilege. Therefore you have a more luxurious and convenient repayment tenure for a personal loan than a credit card
You can earn a lot of benefits and rewards with a credit card. While you can collect reward points and travel bonuses with a credit card, and redeem them for future gifts and benefits, there are no remunerations with a personal loan.
Author Bio :- Neha Sharma is a finance student who loves to write about personal loans and more. She wishes to share all relevant information related to personal loan interest rate and personal loans EMI calculator to the public so that they can understand the benefits of using it.
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