You can depend on two convenient financial choices if you want to meet urgent financing criteria or pay off debt: credit cards and personal loans. Although you can use personal loans as a debt consolidation loan to pay off several debts at once, you can use a credit card to finance your immediate to short-term financial needs.
And although applying online and accessing both credit cards and personal loan is easy, they serve slightly different purposes.
If you are looking for the answer to the age-old question: 'What is the difference between a credit card and a personal loan?’ Read our guide to make sense of this:
The Borrowing Limit
When it comes to credit cards, the borrowing cap is the credit limit that is determined based on your income and other factors. Conversely, lenders offering personal loans measure your borrowing amount on the basis of various variables such as your salary and credit history. If you are looking to see how much you can borrow, you can use an online personal loan eligibility calculator and check how much you could qualifying for before applying.
Additionally Read: Personal Loan App Features & Benefits
The Purpose of either kind of financing
A credit card is a very popular kind of plastic money, and it's important to note that it gives you an income-based credit cap, which you can use to pay for expenses. Paying for your day-to-day expenditures including electric bills or purchasing goods and services may be convenient using a credit card. You can also use it for personal as well as professional purposes in a short-term cash pinch. The sum you use is like a loan in the next billing cycle that you have to pay for.
Read Also: An App To Ease Your Home Loan Process
