When you are looking to take a personal loan, suddenly you get calls from your bank to take a loan against your credit card. You are surprised and confused at the same time wondering if both are same! You will be curious to know how will both affect your credit rating and which is a better option.
A loan against credit card is a better option in the given circumstance for a couple of reasons
1. It is pre-approved, which means, all that you need to do is say yes to the tele-caller and the dd will be sent to you. Depositing the DD is indicative of your acceptance of the loan. In a comparative sense, when you apply for a Personal Loan, there will be paper work to be dealt with, which is almost nil in the case of a loan on a credit card.
2. Also, the interest rates on Pre-approved Loans based on credit cards is marginally lesser than normal Personal Loans as the lender is lending based on your good track record on the card.
As indicated, interest rates between a loan on credit card and personal loan vary on an individual basis and hence you need to take stand on what is applicable in your situation.
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