Personal Loan Tips: Today, if a person needs funds urgently, there is an opportunity to get personal loans. Loans can also be obtained through credit cards. But there are various factors to consider when choosing loans.
When a person is in a financial emergency, they try to take out personal loans. Today, there are many such loans around us. But there is always a doubt that remains whether to take out personal loans or take out a loan using a credit card.
Since both of these are unsecured loans, let’s compare and understand the features of these two loans. Loans above credit card are usually pre-approved loans. Therefore, this amount reaches our account very easily. The loan amount is available according to the limit of the credit card we have.
But instant loans are available depending on various factors like our KYC, salary, credit score.
Let’s look at other factors to keep in mind:
Interest rate: Credit card loans have a relatively higher interest rate. When it comes to interest rates, instant loans are better. Because even a small difference in interest rates makes a big difference in the rate. Even a 60-70 basis point difference in interest rates can significantly affect the interest. Credit card loans also have a longer tenure.
Processing fee : Banks charge a processing fee at the time of applying for a loan. This is charged from the loan amount. This means that the amount that reaches the bank account will be less. Therefore, it is better to evaluate which processing fee is higher.
Time: The main factor that we should consider when deciding which loan to take is the time it takes to approve the loan. How quickly the loan is approved is important. If you need an amount urgently for some urgent matter, it is advisable to choose the loan that is approved first.
Other costs: Another factor to consider is whether there are any GST or other charges on the loan. If such costs increase, our repayment liability also increases.
Credit score: Credit score is a measure of our repayment capacity. If you have taken a loan, it will be reflected well in this credit score. If you have taken a loan using a credit card, if that loan even affects the credit limit, it will have a negative impact on your credit score. So, be careful to take a loan that does not affect your credit score.
