A credit card allows you to access a line of credit issued by a lender. It may be secured or unsecured. On the other hand, personal loans are unsecured loans that can be used for various purposes. These include financing holiday expenses, mobile bills, rental deposits, a 2/4-wheeler purchase, etc. In addition, fintech companies offer instant personal loans on their online loan apps for urgent cash needs like medical emergencies and debt consolidation.
How Instant Loan is Better Than a Credit Card
● Credit Assessment
Your eligibility to get a credit card is assessed by your credit score. It is calculated based on factors like your loan repayment history, number of loan applications, etc. However, suppose you apply for an instant loan on the online loan app of a top fintech company. In that case, your creditworthiness is determined by an advanced credit rating system called the Social Loan Quotient (SLQ). The SLQ score is evaluated based on modern factors like social media footprint and smartphone metadata. Other simple factors considered include your KYC details, educational qualifications, career experience and salary. This makes it easier to qualify for an instant loan than a credit card.
● The Utilisation of the Credit
Credit cards usually have a recommended credit utilisation ratio (generally 30%). A very high ratio can bring down your credit score. This can make it hard to get new loans. However, there is no limit to utilising the amount of a personal loan. You can borrow up to ₹4,00,000 on a fintech company's online loan app and use the money as and when you need it.
● Access to Cash
You generally need to pay a cash advance fee whenever you use a credit card to withdraw cash from an ATM. So, using a credit card to make cash payments is not advantageous.
However, after the disbursal of an instant personal loan, you can withdraw the funds within a few minutes to meet your cash requirements.
● EMI Facility
Every credit card doesn't allow you to pay the card balance in EMIs. Even if some cards come with this option, you may have to spend more than a specific amount to be allowed to pay the bill in EMIs. However, you can pay the entire amount of a personal loan in EMIs. If you apply for an instant loan from a fintech company, you can pay off the EMIs in 90, 180, 270, 365 and 540 days via IMPS or NEFT.
Conclusion
To conclude, instant personal loans are more flexible than credit cards and useful for urgent cash needs and small-ticket expenses. So, download the online loan app of a reputed fintech company on your Android or iOS device and apply for an instant loan whenever you need quick access to cash.
