Both instant loans and credit card loans are vital financial products and utilizing them depends on your requirements. A credit card allows you to swipe your card and enjoy the benefits, whereas an instant loan is an advanced form of personal loan which allows you to borrow money instantly.
Both the options are convenient to use and easy to borrow as they come with a lot of benefits. But choosing one among the two depends on your affordability and requirements. So, let us draw a comparison between the two based on your necessity and also highlight the features of both to make the comparison easier for you.
Ticket-size – The credit limit of a credit card is twice or thrice your monthly salary. For example, if your salary is INR 20,000 per month, your credit limit will either be INR 40,000 or INR 60,000.
Instant loans, on the other hand, are unlike credit card loans, because here apart from your salary, your debt-to-income ratio, job stability, credit score and repayment capacity will be taken into consideration. Hence, the ticket-size of instant loans are much higher than those of credit card loans and can be utilized to finance any major expense.
Unsecured loan – Both instant and credit card loans are unsecured and require no collateral. But terms and conditions in case of non-repayment and delayed payments are a little different from the traditional loans. So read the entire agreement before signing the dotted line.
Documentation – Credit card does not require much documentation. If you have availed a credit card from the bank of which you are already an existing customer than there is no documentation required.
Considering instant loans, basic documentation is required. You either submit or upload copies of ID, residential and income proofs to avail a loan. The process is done completely online and requires no physical documentation.
- Tenure – There is no fixed tenure period for a credit card loan. You can borrow and repay the amount within your credit limit.
For an instant loan, the tenure period ranges from a minimum one year to a maximum of five years. So, if you need a loan for a longer period, go for an instant loan.
Loan amount – A credit card with its credit limit can be considered equivalent to the loan amount. So you can use the funds within a particular limit without any restrictions and the interest will be charged only on the withdrawn amount.
Instant loan is similar to the normal loan and you get qualified for a loan based on your repayment capacity.
Expenses – You can buy anything with your credit card, only if your lender accepts the card, thereby limiting your purchases to an extent.
In case of instant loans, you can use the funds anytime and anywhere. With an instant loan, you can renovate your home, consolidate your debts, pay for any urgent medical expenses or plan an impromptu vacation. Since the loan amount will be available in your bank account, you have no limitations in using the funds.
Lastly, based on your financial need, time frame and how soon you can repay the amount, opt for either an instant loan or a credit card loan. I suggest an instant loan at FlexSalary is the best choice always as you can repay the amount in flexible payments.