Published on: June 22, 2025
Choosing between a personal loan and a credit card loan can be tricky. Both have their benefits and drawbacks, and the right choice depends on your financial goals, repayment capacity, and urgency. In this guide, we’ll compare the two borrowing options to help you make an informed decision.
What is a Personal Loan?
A personal loan is an unsecured loan provided by banks or financial institutions for a fixed amount and tenure. It is repaid in equal monthly installments (EMIs) over time and usually has lower interest rates compared to credit cards.
What is a Credit Card Loan?
A credit card loan refers to borrowing against your credit limit or using the credit card EMI facility. It’s suitable for smaller, short-term expenses and provides flexibility but comes with higher interest rates.
Comparison Table: Personal Loan vs. Credit Card Loan
| Criteria | Personal Loan | Credit Card Loan |
|---|---|---|
| Interest Rate | 10% – 18% | 18% – 36% |
| Tenure | 12 – 60 months | Up to 24 months |
| Loan Amount | ₹50,000 to ₹25,00,000 | Depends on credit limit |
| Documentation | Moderate | Minimal |
| Approval Time | 1–3 days | Instant |
When to Choose a Personal Loan?
- You need a large amount of money
- You want longer repayment tenure
- You prefer lower interest rates
- You can wait for a few days for processing
When to Choose a Credit Card Loan?
- You need funds instantly
- You need a small loan for short term
- You already have a good credit card limit
- You prefer minimal paperwork
Pros and Cons
Personal Loan
Pros: Lower interest, longer tenure, higher loan amount
Cons: Slower approval, more documentation
Credit Card Loan
Pros: Instant disbursal, minimal documentation
Cons: Higher interest, smaller amount
Conclusion
If you're looking for a large amount and better repayment options, a personal loan is ideal. For smaller, urgent needs, a credit card loan may offer faster access. Assess your needs, compare costs, and choose wisely.
Use Personal Loan Calculator