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To take a personal loan or borrow against a credit card? Here's how you must decide

The repayment tenure and the loan size must be the main deciding factors

April 27, 2021 / 10:16 AM IST

Personal loans and credit card loans share the common advantages of quick disbursal, no collateral and zero restriction on end-usage of funds. Hence, choosing between the two can prove to be a confusing task for many.

Let us understand these loan options closely and make an informed choice.

Loan eligibility

Lenders factor in several facets of the applicant’s credit profile while evaluating their personal loan eligibility. Chief amongst these are applicant’s monthly income, credit score, other loan obligations, job stability and employer profile. On the other hand, loan against credit card is a pre-approved debt sanctioned by credit card issuers to select existing holders primarily on the basis of their spending pattern, card type, credit limit and bill repayment history.  Banks and NBFCs lend personal loans to both their existing customers as well as others, subject to the fulfilment of loan eligibility criterion.