New Delhi: Karthik, who lives in Mumbai, wanted to gift an iPhone to his wife on the occasion of anniversary this month. But due to tax savings for the financial year, his bank balance got emptied in early January.
In such a situation, Karthik had two options to please his wife, either he did not take a personal loan from the bank or he could swap his credit card and get his EMI made. Many times you people also get stuck in this confusion like Kartik. To solve this problem, the team of India TV Paisa is going to tell you about the aspects related to credit card and personal loan. Based on which you can easily reach your final decision.
With credit card there is no tension of papers
Comparisons between personal loan and credit card loan follow a certain procedure in both. But still the credit card loan is easily and quickly obtained. If you apply for personal loan online, for this you have to physically submit your pay slip, form 16, bank statements and KYC documents to the bank.
This whole process can take from 48 to 72 hours to about 1 week. Whereas, for credit card loans, all you have to do is place a request for a loan on your card on the customer care number. Within 24 to 48 hours this amount is credited to your account. Direct EME facility is available in online banking in HDFC Bank.
You can convert purchasing into EMI yourself
According to experts, if you want to take a loan for a short time, then a credit card is a better option. Banks like SBI to ICICI and HDFC give loans on credit cards. These banks offer EMI options ranging from 6 months to 24 months. Converts purchases made with SBI and HDFC credit cards into EMI within 30 days. According to bankers, personal loans are collateral free loans, so banks tend to be conservative in giving personal loans. Also, the paperwork is more in personal loan.
Credit cards are better for short term loans
Credit cards give you a flat rate loan, whereas a personal loan gives you a reducing rate. That is, with the reduction of the principal amount, the burden of installments is less. Its advantage is available in long term loans.
But if you are taking the loan for 3 months or 6 months then the EMI option of the credit card is better. Because banks give personal loans for 12 to 24 months. Most banks offer an option to convert purchases made above Rs 2500 into EMI. In such a situation, from small purchases to large purchases, you can convert EMI.
For a large loan, reduce the installment of personal loan like this
If you are looking to take a large loan of 1 to 2 lakhs or more, then a personal loan is better than a credit card. Because the first thing is the limit on the credit card, while paying the interest for a long time, the interest amount increases a lot. In such a situation, you can take a loan against FD or gold. Taking a loan against FD has to pay much less interest than a personal loan. This is because loan against FD falls under the category of secured loan, whereas personal loan is considered relatively unsecured. Therefore, if you suddenly need money, then instead of personal loan, we would recommend taking a loan against FD.