Most people have faced at one point or another in their lives a situation where they simply did not have enough money for whatever it is they need. In most cases, people choose to borrow money from a financial institution until they can pay it back, which in itself is a practice that makes sense. However, with more and more people looking to get loans for different types of situations various types of loans have been put into existence. As a result, people are now constantly wondering what kind of credit loan would be more advantageous for them, with one of the biggest debates being centered around using a credit card or a 12-month loans. Needless to say, before making a decision it is important to look at the advantages and drawbacks of each option, but keep in mind that more often than not, the amount of money you need and the time frame in which you need it in will be the main factors in your decision.
Considering the Amount of Money you Need
To start things off, you need to know how much money you will require, down to the penny. Of course, you should leave room for unexpected occurrences, but you do need to have a solid idea of the amount you are going to ask for. Also, as mentioned above, the time frame in which you need the money is also important. If you are looking to get money right now, then your best option would be to use a credit card for a loan will take time to get approved. If however your needs are not instant and you can afford to wait, then perhaps a loan will suit your needs better.
Interest Rates
First, it should be noted that credit cards can literally generate money instantaneously while persona loans take a few days. However, you must remember that in most cases, credit cards have higher interest fees than regular loans. The best part is that if you have a good credit score, you can actually get a personal loan at an even lower rate.
Your Relationship with the Bank
If you have been with your bank for many years without ever causing any kind of trouble with them, making all your payments on time and such, then it is very possible that you will be able to obtain a personal loan within 24 hours. However, the funds will never be made available immediately as they would with a credit card.
Consequences
It is very important to note that whenever you use a credit card a certain reduction is made to the amount available to borrow; advances are deducted from your credit limit. On the other hand, taking out a personal loan has no ill or beneficial effect on your maximum credit borrowing limit.
Final Verdict
So in the end, which is best? Well, to be perfectly fair, it all depends on whether or not you can wait for the money. If you cannot, then you will have to use the credit card… however, if you can spare some time then you should definitely go for a personal loan as you’ll be able to save some money on the interest rates.
