By Admin 
Personal Loan vs Credit Card: Many times such an emergency suddenly arises for which money is needed immediately. A medical emergency or a financial emergency can occur at any time. In such a situation, people have two options: borrowing from someone or taking a personal loan, or using a credit card.
However, personal loan or credit card is also a kind of loan. You can get quick money from both, but the methods and expenses of both are different. Therefore it is important to choose the right option. But how will that happen? Let us tell.
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What is personal loan?
In personal loan, the bank or financial institution gives you a lump sum amount. You have to repay this amount through EMI every month within the stipulated time. Usually its interest rate is fixed in advance, so that you know in advance how much installment will have to be paid every month.
What is a credit card?
In a credit card, you get a fixed credit limit, which can be used anytime when needed. If you pay the full amount of the bill by the due date, usually no interest has to be paid. But if the payment is not made on time, heavy interest and other charges may be imposed on it.
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Personal Loan Vs Credit Card
Both are used in different ways, like if you need a large amount of money like Rs 2 to 5 lakh, like for hospital bills or any major work, then personal loan is a better option. It has fixed EMIs, making it easy to pay and often cheaper than carrying a credit card outstanding for a long time.
So, if you need a small amount like Rs 10 or 20 thousand, you can pay the full amount when the salary comes next month, then credit card is a better option. There is no process of taking loan in this and the money is received immediately.
Which of the two is better?
While choosing a loan or credit card, one should not only look at the interest rate. Processing fee on personal loan and penalty may be imposed if EMI is over. At the same time, late payment charges, finance charges and other fees can also be added to the credit card. Therefore, take the decision only after understanding the total expenditure.