Personal Loan vs Credit Card: Which One is Better for You?
When you need extra funds for big expenses, emergencies, or debt consolidation, you might wonder whether a personal loan or a credit card is the better option. Both have their pros and cons, and the right choice depends on your financial needs and repayment ability. In this guide, we’ll break down the differences between personal loans and credit cards , their benefits, and when you should choose one over the other. What is a Personal Loan? A personal loan is a lump sum of money that you borrow from a bank, credit union, or online lender. It comes with a fixed repayment term, usually ranging from 2 to 7 years, and fixed monthly payments. Personal loans can be secured (backed by collateral) or unsecured (based on your creditworthiness). Pros of Personal Loans: ✅ Lower Interest Rates – Compared to credit cards, personal loans often have lower interest rates, especially for borrowers with good credit. ✅ Fixed Monthly Payments – The repayment amount remains the same, making it e...