Personal Loan vs. Credit Card Loan – Which One Should You Choose?
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When you need quick access to money, two common options are personal loans and credit card loans. Both can help in emergencies, but they differ in terms of cost, flexibility, and repayment. At Borrow Right, we guide you to make smart borrowing decisions that match your financial situation.
What is a Personal Loan?
A personal loan is an unsecured loan offered by banks and NBFCs to cover expenses like medical bills, education, weddings, or debt consolidation. It comes with a fixed interest rate, EMI schedule, and tenure ranging from 1 to 5 years.
What is a Credit Card Loan?
A credit card loan is borrowing against your existing credit card limit. You can either convert a large purchase into EMIs or take a loan on your available credit limit. The interest rates are usually higher than personal loans, but approval is instant, and paperwork is minimal.
Key Differences Between Personal Loan & Credit Card Loan
| Feature | Personal Loan | Credit Card Loan |
|---|---|---|
| Approval Time | 1–3 days (sometimes instant for pre-approved customers) | Instant (if you have a credit card) |
| Interest Rate | 10% – 18% p.a. | 18% – 36% p.a. |
| Loan Amount | Higher (₹50,000 – ₹40 Lakh depending on profile) | Limited to your credit card limit |
| Repayment Tenure | 12 – 60 months | 3 – 36 months |
| Flexibility | More structured, predictable EMIs | Quick short-term relief but costlier |
When Should You Choose a Personal Loan?
✅ For large expenses like weddings, higher education, or home renovation.
✅ When you want a longer repayment period with manageable EMIs.
✅ If you need a higher loan amount than your credit card limit.
When Should You Choose a Credit Card Loan?
✅ For urgent short-term needs like medical emergencies.
✅ If you already own a credit card with sufficient limit.
✅ When you want instant approval without paperwork.
Which One is Better for You?
If you’re looking for lower interest rates and higher loan amounts, a personal loan is the right choice.
If you need quick, short-term funds, a credit card loan works better, but only if you can repay on time to avoid high interest.
Borrow Right – Helping You Choose Smartly
At Borrow Right, we understand that every borrower’s need is unique. Our advisors help you compare options, check eligibility, and choose the right loan at the right time.
📞 Contact us at +91 9429690747 or email ask@borrowright.in to find the best borrowing solution today.
