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What is the difference between a personal loan and a credit card ?

April 26, 2017credit card personal loan

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What is the difference between a personal loan and a credit card ?

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Personal loans and credit card differ in quite a few ways: • Amount: In personal loan the borrower takes a fixed amount of loan. However, in a credit card the lender sanctions a limit upto which a borrower can take a loan. The amount is not fixed. He can choose to take a loan lesser then the sanctioned limit as well. • Time taken by the lender to sanction loan: About 7 days of sanction time is required for a personal loan, while for a credit card it is immediate if the borrower already has a credit card. • Repayment: In personal loan, the repayment needs to be necessarily done through EMIs. In credit card, the borrower has the option of choosing an EMI or paying as per his own convenience without a repayment schedule. • Prepayment: You can repay a credit card debt at any given point of time – there is no fixed tenure or EMI schedule attached to it. You need to pay prepayment charges in a personal loan in case you want to make an advance repayment. • Interest rate: Usually, credit card

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Personal Loans are ideal for consolidating multiple balances into one fixed monthly payment for a set term (i.e. 36 to 84 months). A personal loan can be a good way to pay down your debt more quickly than a credit card.