Credit card Vs. Personal loan: Which is better when you need immediate cash?


do you have any information on the credit card and personal loan? The cash crunch is a big problem in people’s lives that can occur anytime. Many times, the scarcity of money makes people financially unstable. In these situations, they are unable to achieve specific targets such as pursuing higher education, buying a new car or new home, etc.

In such a case, people are confused about choosing between a personal loan and a credit card. This article is written on the comparison of credit cards with personal loans.

Interest rates

People are more concerned about the interest rates when they are going to take a loan from an external source. Interest rates applicable on personal loans are lower than credit card interest rates.

Customization of the interest rates

When you get a personal loan from a recognised bank, you will get the option to customise the interest rate. Borrowers have two options while opting for a personal loan, one is a secured personal loan, and the other is an unsecured personal loan.

The loan amount in a secured loan is backed by collateral, whereas the loan amount in an unsecured personal loan does not need collateral. Unsecured personal loans have come with more excellent interest rates than secured loans.

In this way, the borrower gets the option to customise the interest rates from either option. Credit cards do not provide these options for the customisation of interest rates.

Repayment schedule 

When you take a personal loan, you always get a fixed repayment schedule. It means that the personal loan has come with the fixed repayment date of EMI.

If you choose credit card over personal loan, you have to wait until the invoice for the payments is issued by the banks from where you get the credit cards. In this way, budgeting becomes more difficult when you opt for a credit card.


There is too much paperwork involved for first-time borrowers when they opt for a personal loan. You have to submit many forms and attach many documents with them. That is a time-consuming process.

On the other hand, if you consider credit cards, you will get relief from the paperwork. Credit card applications involve less simplified paperwork.

Option for the part payments 

When you opt for a personal loan, you will not get the choice to make partial payments of the total loan amount. However, some agencies offer the partial payments option.

In case of a credit card, a significant relief comes from the factthat there are no such rules related to the pre-payments.


In the end, it is concluded that personal loans are better for borrowers if they are frequently caught in the immediate need of cash.

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