There comes a time where you might opt for additional assistance for your financial requirements. There are plenty of options you can opt for, out of which loans and banking cards have been a favourable option.
Further in these options include the personal loan and credit cards. Each of these options have different benefits, which you can easily utilize depending on your requirements. However, these options also come with different features, which you must be aware of. Let us compare these two options to know how you can benefit from them:
Your level of expenditure
Before opting for any option, you will need to consider your financial expenditures. As mentioned earlier, each of these options come with different features, which are suited for different financial requirements. Therefore if you are making small expenses that will include daily purchases, shopping and dining expenditures the credit card is the best option. You can benefit from reward programs and even the repayment can be done conveniently before the due date. The personal loan option, on the other hand can be used for large expenditures. It can be used to repay consolidated debts. With the ideal personal loan interest rates, you only need to repay the loan within two to three years.
Fixing the ideal repayment tenure
One of the main benefits of the credit card is the repayment date. When you use the credit card, it normally does not come with a predetermined repayment schedule. However, the interest rates will differ depending on when you repay the amount. This occurs usually, when you only pay the prescribed minimum amount, wherein the balance is carried to the next month at an added cost. Personal loans on the other hand may come with a fixed payment schedule. However, they also come with a fixed personal loan interest rates. This allows you to fix your financial repayment plan that will ideally suit your needs well within the tenure. In the end, the choice depends solely on the repayment of the borrower.
Simplicity of the usage
When it comes to using the credit card or the personal loan, each has its different features. The personal loan will only be processed depending on the profile of the borrower. Additionally, other factors like personal loan interest rates, repayment tenures and loan amount will also be negotiated between with the borrower and the bank. Once all these factors are fixed, the borrower may or may not be sanctioned the loan. However, one can easily apply for the credit card. Additionally, if there is any financial requirement, the card owner merely needs to swipe the card to borrow funds.
Knowing these benefits, you can now choose which option satisfies your financial requirements and yet provide you with financial requirement you would want.
Author Bio :- Neha Sharma is a finance student that loves to write during her spare time. She has considerable information about the different financial options like the credit card and the personal loan . Through her work, she has provided details on factors like the personal loan interest rates amongst many others. She hopes that these details will provide you with the ideal benefits of each option for your consideration.