Both personal loan and CC loans are unsecured loan and offers the same purpose. It depends on the customer that on which personal requirement he/she wants to spend the credited amount.
Both the loans can be considered in the same category of loan for personal requirements. Many banks enhance your loan amount over and above the credit limit too in case of good past record.
In CC, if previous outstanding remains unceared , tax is levied on all unbilled amount .
Along with processing fees and pre-closure charges, CC loans come with an additional cost of goods and services tax (GST).
If the purchases are converted into EMIs (Easy Monthly Installments) then also the customer have to pay GST on the interest amount.
Its easier to understand the terms and conditions of the Pl and pay the amount as fixed t the initial stage of funding , hence its advisable to opt for PL over CC.
Top 5 reasons to opt for personal loans over CC.
Rate of interest is cheaper in PL over cards– It starts from 10.99% and the highest can reach up to 22% unlike credit cards that starts with 24% and goes upto 36%/annum . Also PL amounts to reducing ROI where as CC has flat rate of interest hence consumer ends up paying more in cards .
A Higher Loan Amount– Pl offers high sanction value as compared to CC limit. We can always avail a higher amount when we opt for a personal loan.
EMI Based Repayment– PL offers fixed amount of emi that needs to be repaid. When a loan is sanctioned, at that very point of time we are aware of our EMIs.This starts from the next month of loan sanction . So we can make a budget according to our monthly expenses as we know that we are to service EMIs. This makes us more stable in our finance. But if you go for a CC there is no hard and fast amount which we must pay. So any person tends to become inattentive about the payment of the CC bill which is never good for our financial health.
Have a Fixed Tenure– PL offers fixed repayment tenure means a borrower knows the exact day when he/she will be out of EMI burden or when the repayment of the loan will be completed. So knowing the fixed time, one can easily make proper plans for his upcoming financial milestones. Making a well thought out plan is very important to reach any financial goal of a person’s life. But as it is known that CC payments are not fixed, so having such plans when you have to pay a huge CC bill is very difficult indeed.
Improves Credit Score– The credit score of a person is much affected by credit utilisation ratio. If your credit utilisation ratio is more than 30% it will bring your credit score down. This means if you use more than 30% of your credit limit, it will affect adversely in your credit score whereas the credit card outstanding is considered as revolving debt that increases utilization ratio and lowers CIBIL score. Nowadays one can apply for a personal loan easily with online platforms. Personal online loans have become very easy to opt as such loans are being disbursed in just 24 hours fro the inception of E-kyc . One can easily avail online loans from online portals like shubhbank.com and enjoy the benefits of it over CC.