Are you in need of emergency cash to meet up your expenses? If you don’t want any help from relatives or friends, you have to apply for a bank loan. Among so many kinds of loans, it is really difficult to find the right kind of loan that fits your need. Unsecured loan, as the name suggests, is the loan without collateral. Credit card loan is taken against the credit card but you need to be an account holder in the bank. Whether you want to make a big-ticket purchase or are worried about exhausting your savings, there is no need to worry. Borrow the fund you require from the bank to meet your emergency cash needs and payback timely. A borrower has to make payment by way of fixed monthly installments called the EMI. So, there are options like unsecured loans and a credit card loan.
The interest rate of the loan
The unsecured personal loan has a high-interest rate for there is no collateral involved. This sort of loan is taken to fulfil the medical needs, to meet up vacation charges or even for debt consolidation at times. The unsecured loan also requires a lot of documentation and it may take a few days to gain approval. Credit card loan is a suitable option when there is a lack of sufficient capital and you need a loan on an emergency basis. Credit card loan gives speedy access to cash. But then, for credit card loan utmost prudence and complete care is required.
With credit cards, the debt repayment may become impossible if the decision of investment takes a downturn. Besides, the banks and financial institutions may reject your loan request when you don’t have a decent credit score. Even if you gain approval for the loan, the interest rate may be very high. So, improve your credit rating if you want affordable credit card loan. The interest rate can range between 10 and 18% for credit card loan and 13 to 22% for a personal loan.
Basic features of credit card loans and personal loans
- There is no need to be an account holder in the bank for personal loan but to avail credit card loan; you need to be a customer.
- Credit card loan is taken for a short duration, unlike unsecured loans. If you want a loan for a long duration, apply for an unsecured personal loan.
- If you need only a small amount of cash, then apply for a credit card loan. Unsecured personal loan gives access to huge sums of money.
- You may borrow a personal loan for child’s education, to meet medical expenses, home decoration, and remodelling and for wedding purposes. For business purchases or to meet a personal need, you can apply for credit card loan.
Applying for the loan
To apply for a personal loan, you need to approach a bank with proper documentation. For credit card loan, apply online with the credit card or by using the store credit card. While in the unsecured personal loan, repayment is made in the form of EMI each month, the credit card loan is repaid at the end of the credit period.
Both credit card loan and unsecured loans may turn nightmarish if you have no way to make the repayment. Before even borrowing the money, you should calculate the amount you need to pay to the lender along with interest rate.