Personal Loan vs Credit Card Loan – Which One is Better for You?

By BANKBRIZ™

When you need urgent money, two of the most common options are Personal Loans and Credit Card Loans. Both can provide quick financial support, but the right choice depends on your repayment capacity, interest rates, and financial goals. In this guide, we’ll break down the difference between personal loans and credit card loans, so you can decide which is better for you.

What is a Personal Loan?

A personal loan is an unsecured loan provided by banks and NBFCs. It does not require collateral and can be used for any purpose like medical expenses, travel, weddings, home renovation, or debt consolidation.

Key Features of Personal Loan:

• Loan amount: 50,000 to 40,00,000 (depending on eligibility)

• Tenure: 12 to 60 months

• Interest rate: 10% – 18% p.a. (varies by bank & credit score)

• EMI-based repayment

• Requires income proof & CIBIL score check

What is a Credit Card Loan?

A credit card loan (also called a cash advance or EMI conversion) allows you to borrow funds against your credit card limit. It is faster but usually comes with higher charges.

Key Features of Credit Card Loan:

• Loan amount depends on credit card limit

• Tenure: 3 to 24 months (for EMI conversions)

• Interest rate: 18% – 42% p.a.

• Instant approval for existing credit card holders

• No extra documentation required

Personal Loan vs Credit Card Loan – A Quick Comparison

Feature	Personal Loan	Credit Card Loan
Loan Amount	Higher (up to 40 Lakhs)	Limited to your card limit
Interest Rate	Lower (10%–18%)	Higher (18%–42%)
Tenure	Flexible (1–5 years)	Short (up to 24 months)
Approval Time	24–48 hours	Instant
Documentation	Required	Minimal
Best For	Large expenses, long-term repayment	Small, short-term needs

Which One is Better for You?

• Choose Personal Loan if:

  • You need a bigger loan amount

  • You want lower interest rates

  • You prefer longer repayment tenure

  • You are planning for medical expenses, education, home renovation, or debt consolidation

• Choose Credit Card Loan if:

  • You need instant cash

  • The loan amount is small

  • You can repay quickly within a few months

  • You already own a credit card with good limit

Conclusion

Both personal loans and credit card loans have their pros and cons. A personal loan is more cost-effective for larger and long-term financial needs, while a credit card loan is suitable for smaller, short-term emergencies.

Before applying, always compare interest rates, tenure, and repayment flexibility. Platforms like BankBriz.com help you check your personal loan eligibility online for free, so you can make smarter financial decisions.