Comparing Personal Loan and Credit Card Loans

By on March 1st, 2017

credit card loan
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A few decades back, a personal loan was the easy and immediate solution to balance emergency financial needs, especially in the absence of collateral security.

However, with the advent of credit card loans, the scenario has changed. The statistics reported that in the second quarter of 2016, the number of credit card loan application and approval has increased, while other consumer loans like housing and personal loans have decelerated. Do you need more information concerning personal loans and credit cards? Continue reading this financial blog.

What is Personal Loan?

A personal loan is a type of loan used by people to fulfill their financial requirements such as a wedding, medical emergencies, paying off other debts & home renovations. Quick approval with fewer documents and loan approves as quick as in one day. With the use of technology and the internet, you can apply for a personal loan online.

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Personal loans are specially designed for people who don’t want to go through the hassles of providing security or hypothetical. Make your personal loan easily with a wide quantum of the loan amount when faced with a financial crisis.

What is Credit Card Loan?

A credit card loan is also known as a personal loan or home equity loan. When you need to borrow money to cover the expense, consider a credit card.

Credit card loans are given out by credit companies in most of the banks today. The interest rates on credit card loans are higher than that on most personal loans, often around 15%. The interest rate on the credit card is generally between 2.65% to 3% so per annum it would be 31.8% on the outstanding balance.


Both personal loans and credit card loans are categorized under unsecured loans, without the need for collateral security. The interest rate of these two loans is high when compared to the secured loans. Generally, the interest rate is calculated by reducing the balance technique and is repaid through a regular EMI.

When is credit card loan right for you

The key difference between a credit card loan and a personal loan is the processing period. Credit card loans do not involve too many terms and conditions, yet can be availed only within your credit limit. Regular repayment is required to maintain your credit standing. The key benefit of a credit card loan is that you can constantly withdraw; spend; and repay it, without anybody’s approval.

Advantages of credit card loans:

  • Immediately available for spending
  • Loans are accompanied by rewards
  • Ensures a constant flow of cash
  • Balance transfer option for consolidating debts
  • Interest-free days
  • Best choice for small debt consolidations
  • Ideal for small purchases
  • Short term loan
  • Ideal for everyday use to obtain reward points
  • Withdraw the required amount and pay interest only for the withdrawals

With proper identity proof, income proof and a few more document copies, you can immediately apply for the credit card loan and get it approved. Certain banks allow a maximum of 48 months as an installment schedule. Further, there are plenty of free offers and they are listed below:

  • Free ATM withdrawals, without any transaction charges, if you use the ATMs with certain logos
  • No annual fees
  • No credit transfer fees

Benefits of all the offers and rewards of the credit card loans can be availed only if you are an organized individual, who has complete control over the spending and repayment. If your income status does not allow you to promptly pay the debts, high interest may knock back your financial status.

Author Bio: Janie Sakda is a Wealth Specialist with one of Thailand’s largest specialist financial planning organization also play as a Financial Advisor (check the blog link).