Personal Loan vs. Credit Card Loan-Which is More Feasible?

There are a number of loans offered by the government and the financial institutions letting us perform activities requiring substantial funds. However, when it comes to higher education, marriage, down payment for your new house, personal financing, etc., there emerges a demand for personal loans, which helps us immensely in financial emergencies. There is also another alternative to personal loans known as credit card loans.
1. Both are short term unsecured personal loans. Both have similar interest rates mostly high as they are not issued against any security.
2. These loans can be availed in any financial emergency and pre-closed any time.
Today processing personal loans is easily done online. Traditionally, the applicant had to visit a bank to another with loan application and indulge in a lot of paperwork, with long wait before the loan would be approved. But now within just few hours, loan after its approval, can be disbursed to bank account.
Credit card loans are instant loans as the credit score and other checks are already conducted while issuing the card. In fact, you have a fixed credit limit. The procedure is simple; you call the customer support and ask for the approved credit limit. You either swipe or get a DD from the credit card company within a short time.
How Does Personal Loan Differ from a Credit Card Loan?
The two being similar, there persists a huge confusion as to which one is better. Let us find out differences between them to comprehend:
1. Processing fee and pre-payment: the personal loans have a 0.5-1% processing fee whereas credit card does not have any. There are also pre-payment charges varying from 2-5% on the outstanding balance. There are no pre-payment charges on credit cards letting you close it anytime you hold surplus cash.
2. Interest rates: Credit card may offer 0% interest initially and later 1.5% to 2.5%. On the other hand, personal loans charge 12-18% interest rates. It can be high based on the customer profile
Be Cautious With Credit Spending
Though the interest rates for credit card seem to be attractive on a monthly basis, they are however charged annually making the interest go higher than personal loans. Any delay on credit card loan might require you to pay both EMI interest and outstanding amount. Most of the credit cards holding flat interest rate; you tend to pay interest for the entire loan period.
Keeping these points in mind, choose the most optimum source of the borrowing. Though personal loans seem to be tempting, always prioritize your expenses on existing funds later moving to loans.