The situations when it makes sense for you to opt for credit card EMI over personal loans.
Hello and welcome to FundooMoney, your 24X7 buddy for all your money matters. Interest rate charged on personal loans is typically lower than that for revolving credit on a credit card. Yet, a personal loan may not always be better than credit cards as a loan option. There are occasions when you need to prefer a credit card over a personal loan. If we have managed to catch your attention, then stay with us as we give you the details.
Here are the circumstances when you should use a credit card instead of opting for a personal loan.
When you need money urgently
No matter how quick the personal loan processing is, it would take at least a few days for you to get the loan. So, in case of an urgent requirement you will need to fall back on your credit card.
When you have adequate limit
You can only use your credit card instead of a personal loan when it has a higher credit limit and can provide enough money to address your emergency requirement.
Convenient EMI conversion option
If your credit card has a convenient EMI conversion option at a very competitive interest rate and processing fee, you may find it a better option than a personal loan with a lengthy processing procedure.
Suitable to your repayment capacity
Interest rate and tenure combinations offered by your credit card should suit your repayment capacity. Typically, credit card EMIs provide a maximum tenure of 2 years while in case of a personal loan you can easily get a 5 year tenure. If you can repay your loan within 2 years, it is smarter to opt for a credit card EMI instead of a personal loan.
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