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Instant Personal Loans vs Credit Card Loans: Comparison

The type of loan you choose is entirely dependent on your specific needs. You have two choices: acquire a credit card loan or take out a personal loan. Both Credit Card Loans and a Personal Loans have their own set of benefits and drawbacks, so you should choose one only after considering your borrowing purpose and repayment capacity. 

What is a credit card?

A credit card is a piece of plastic (or metal) that you can use to make purchases and even pay off the debt by transferring balances. Credit cards offer revolving credit, allowing you to spend money, pay it back, and repeat the process. Your credit line will stay active until you opt to close it permanently.

What is a personal loan?

Installment credit, such as personal loans, is a sort of credit. You are offered a one-time cash payment (usually via direct deposit) that you must repay with interest over a specified length of time. Because personal loans aren’t revolving, you won’t be able to borrow money again once you’ve paid off the loan.

Instant personal loans and credit card loans

Instant personal loans and credit card loans are both financial tools. These can help you receive money when you need it the most. Both methods are free of collateral and have no restrictions on end-use, so the funds can be utilized wherever. 

When you use a credit card, all you have to do is swipe to take advantage of its benefits which are far away from the traditional lending process. An instant personal loan is a type of personal loan that allows you to borrow money online with just a few mouse clicks on your computer or smartphone.

When you need to borrow money, both choices are convenient and offer numerous advantages. However, the decision between the two is based on a variety of criteria, including your budget and requirements. To choose the best loan choice for you, you must first grasp the aspects of both loan programs. Below is a list of features that emphasize both instant loans and credit cards so that you can easily compare them.

Loan tenure

There is no defined tenure period for credit cards. As long as you stay under your credit limit, you can borrow and return as many times as you want. The loan term period for an instant personal loan in India, however, might range from a year to a maximum of five years.

Loan amount

The credit limit on a credit card loan is the same as the loan amount. Within that limit, you, as a cardholder, are free to use funds. Again, you’ll only be charged interest on the money you’ve spent.

The situation is different with instant personal loans. Credit limits are determined by your credit score, financial history, and pay stubs. For a period ranging from one to five years, you can withdraw any amount you want.


Obtaining a credit card doesn’t necessitate a lot of paperwork. There is no proof required if you apply for a credit card from a bank with whom you already have an account.

Instant personal loans, on the other hand, demand confirmation of residency, identification, and recent pay slips. Even though instant personal loans necessitate the submission of documentation, the process is completely online. As a result, there is no need for tangible documents. You can use your lender’s website or an instant personal loan app to upload your paperwork.

No collateral required

Credit card loans and instant personal loans are both unsecured, meaning they don’t require any type of collateral or security at any point during the loan application process. Instant loans and credit cards, on the other hand, have terms and conditions that differ from traditional personal loans in terms of late payments and non-repayment. You should sign the loan agreement only after thoroughly comprehending the fine print of both loan products.

Interest rate

When it comes to borrowing money, the rate of interest is undoubtedly the most important issue that must not be overlooked at any cost. The interest rate levied on your borrowing must be understood because it is the single most important thing to consider when taking out any loan, whether it be a credit card or an instant personal loan. A 10 percent to 24 percent interest rate is typical for an instant personal loan. Your interest rate is determined by your financial situation.

Using a credit card to borrow money, on the other hand, can be very costly. According to the issuer, the interest rate paid on using a credit card ranges from 16 percent to 32 percent. Credit cards, on the other hand, can be used to take advantage of a variety of incentives. As a result, you might take out a credit card loan during the promotional time to obtain additional perks. 

Personal loans and credit cards can both be used for a variety of purposes. You can use it to buy new things or consolidate debt, but the best solution is entirely dependent on your needs.

If you require revolving finances, a credit card is an ideal alternative. You’ll be issued a credit limit that you can use endlessly after you settle your account. A personal loan, on the other hand, is a better option than a credit card if you need to fund major expenditures or pay off the debt over a long period of time.


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