To help you with quick financing, in times of emergency, opting for an instant loan or a credit card loan can solve your problem. Both these loans are essential financial products and how you utilize them entirely depends on your requirements, whether you need cash or just a card to pay your bills.
With a credit card, you can swipe and avail the benefits, making it different from the traditional loans, whereas an instant loan is another form of a personal loan , which can be applied online with just a few clicks on your smartphone.
However, both the options are convenient to borrow, as they come with lots of benefits. But choosing, any one of them depends on your affordability and requirements. To differentiate, between them and choose the best one, you will have to draw a comparison between them based on your situation and needs. So, in this blog, let us discuss the features of both these loans to make the comparison easier for you.
- Unsecured Loan – Both instant loans and credit card loans are unsecured, which means there is no collateral or security involved at any stage. But as these are unsecured, the terms and conditions for both these loans in terms of non-repayment and delayed payments are a bit different from the traditional loans. So, make sure that you are reading the entire loan agreement before applying.
- Documentation – It is easy to get qualified for an instant loan. You need to only submit a few basic documents such as your ID card, latest payslips and address proof. The process for an instant loan is completely online and does not require any physical documentation. You just need to upload the requested documents on your lenders’ portal and wait for your loan approval.
On the other hand, a credit card also does not need much documentation. If you are an existing customer, it is even easy to get a credit card without further documentation.
- Interest – Interest rate is one of the most important factors which cannot be ignored at any cost while availing any loan. For an instant loan, the interest rate depends on your credit score. If your credit profile is good, you may be approved for a loan with a low interest rate. On the other hand, the interest rate on a credit card loan also entirely depends on your profile and your loan provider.
Also, there are always offers going on for credit cards, so to avail the extra benefit, it is advisable to avail a credit card in the offer period as you may get a flat interest rate on the credit card.
- Loan Amount – A credit card always comes with a credit limit, and you are allowed to use the approved funds without any restriction. Most importantly, the interest is only charged on the money that is used.
But instant loan, on the other hand, is similar to a normal loan. Your loan amount is decided based on your repayment capacity. In general, this loan amount can be huge when compared to the credit limit of a credit card.
- Loan Tenure – For a credit card loan, there is no fixed tenure period. Because you can borrow and repay the credit multiple times within your credit limit. But, while considering an instant loan, the loan tenure period ranges anywhere from a minimum of one year to a maximum of five years.
Instant loans and credit card loans are great ways to get funding for your expenses. If you need a large sum of money and can only repay the amount over a period of time, an instant loan makes more sense. On the other hand, if you want to build your credit score with responsible spending on short-term expenses, then considering a credit card loan is the best option, as you can also earn free rewards and cashback in the process.
So, if you are looking out for any lender to apply for an instant loan, then consider FlexSalary as we provide you with the flexibility to repay your loan conveniently whenever you want. In case you want to repay the full amount at once, you can pay off without any prepayment penalty.