Personal Loans V/s Credit Card? Better Choice among Indian Youths

Posted by Manoj Bhandari on August 1st, 2019

The economy of India is growing rapidly and it is one of the fastest-growing economies in the world. In recent days banking and FIN-tech sector booms in the Indian market and generated thousands of jobs in India. However, many of the FIN-tech companies are still confuse to sell their products in the right way. Most of the sales teams are unable to find the desired customers for their loans and other banking customers, the reason does not understand the choice of the audience what they want.

Why the youth of India is seeking for Loans?

The Indian economy generates millions of jobs every year and youths who are seeking to fulfill their dreams and hobbies are not getting their desired salary from the companies. The massive change in the lifestyle and new trends in the market are forcing youths of India to spend more than their limit.  Buying a car, branded clothes & shoes and going on foreign trips is one of them.

The fight between credit card V/s personal loans.

Recently credit cards became a social status between Indian youths and they mostly ignored the personal loan. A loan word often give signals of huge debts but they most of the time don’t know that credit card is also a form of loan. Here is a small difference between credit card and personal loan.

• Personal Loans:  Personal loans are form of unsecured loan. Like credit card, there is not limitation from the lender’s end for the use of personal loan. You can use it for any purpose from travelling to house making.
• Credit Card: Credit card is also a form of unsecured loan where the lender doesn’t ask for any mortgage. Also like personal loan, there is also no limit on the use of credit card which means you can use it for any purpose.

However, both credit card and personal loans are almost same but there are so many things which makes personal loan better than credit cards.

Why Personal loans are better than credit cards

• In case of cash requirement, getting cash from your credit card is the worst decision as bank charged you with high amount which increase your debts. Indian market is still running on the cash so in real world credit card in not good choice for emergency fund as it is going to increase your debts only.
• The interest rates are very high on credit cards that are around 16 to 36 percent on the other hand personal loan charged only 11 to 12 percent of interest rates.
• The limit on the credit card is quiet low as compare to personal loan can gives you huge amount in a single transaction.
• The late fee on credit card EMI is very high as compare to personal loan.
• Credit card force you to spend more than your budget which helps banking industry to earn more from you but in-case of personal loan you can’t carry unnecessary cash with you which solely helps you in spending less.

How to apply for credit card or personal loan

Anybody can apply for credit card or personal loan & credit card in India. However banks and non-financial companies approve the request only of few applicants by following some points like

• Individuals whose credit scores or CIBIL is more than 750. You can check credit score for free online.
• Individuals who are working in registered companies for 3 to 6 months.
• Banks also check applicants last 3 or 6 months’ salary slips.
• Individual’s salary more than 35 thousand per month.
• No ongoing loan in the account of loan or credit card applicant.

Conclusion:

You can choose credit card if you know how to spend money in limit. Go for personal loan for big purchase as it gives you more time to re-pay with lesser interest rates.