Complete comparison guide to help you understand the differences and choose the right financial product for your needs
| Feature | Personal Loan | Credit Card |
|---|---|---|
| Interest Rate | 8-12% p.a. | 15-24% p.a. |
| Amount Range | ₹10,000 - ₹50 Lakh+ | ₹10,000 - ₹10 Lakh |
| Tenure | 2-7 years | Flexible (revolving) |
| Approval Time | 24-48 hours | 5-7 days |
| Documentation | Minimal (KYC) | Moderate |
| Prepayment | Allowed (few charges) | No penalty |
| Rewards | None typically | Cashback, points |
Personal loans typically have lower interest rates (8-12% p.a.) compared to credit cards (15-24% p.a.), making them cheaper for larger amounts. However, credit cards offer 0% interest for 45-60 days.
Yes, personal loans are unsecured and can be used for any purpose - debt consolidation, home renovation, education, vacation, or emergency expenses.
Credit cards offer flexibility but can lead to debt accumulation. Personal loans enforce disciplined repayment with fixed monthly EMIs.
Generally, a CIBIL score of 750+ is ideal. Some lenders approve scores as low as 600, but with higher interest rates.
Yes, personal loans can be approved in 24-48 hours with minimal documentation. Credit cards typically take 5-7 business days.
Both help build credit, but personal loans show installment credit management while credit cards show revolving credit management. Having both diversifies your credit mix.