Instant small loan apps vs credit cards both serve a single goal of helping with immediate finance without any hassles.
If you have anything to buy on an urgent basis and don’t have that much amount of money in your bank account, you can swipe your credit card and continue shopping.
While those with instant small loan apps benefit from same-day loan sanctions.
So which one is the better option? When you need financial help, which one will you choose- instant small loans or credit cards?
Both are great options to support your urgent financial needs as you can get a personal loan without documents. Let’s go through the benefits to know which one is a better option.
How do a credit card work?
A credit card loan is a convenient way to pay when you require a small or big purchase. A credit card can be used physically in-store or online.
It comes with a downside too. If you lose control of your credit card purchase and cannot pay off all your balance in the time period, you will have to pay very high interest on the remaining unpaid amount. Over time it will push you into a debt trap.
The primary reason you can end up in this situation is that you do not need to pay off your balance all at once. You can keep using your card by just paying the “Minimum Amount Due,” which is mentioned on the credit card statement.
You can keep using your credit card until you exhaust any remaining balance. However, the interest keeps accumulating, and your interest will pile up much faster. Hence, this is why credit card loans are known as revolving debt.
Most credit card loans are unsecured. Some cards may provide some security, which is rare. A secured credit card does not require collateral, whereas you may have to put down a cash deposit as collateral for a secure line of credit.
When an instant small loan works better?
Instant small loan apps for a quick loan online are possibly a better option because it gives control over your repayment. Unlike a credit card, instant small loans are easy to avail of because the eligibility criteria are less strict. At Lenditt, the best loan app in India, you will get a personal loan for salaried employees based on your profile, qualifications, and needs. You can avail yourself of different types of instant small loans customized to suit your individual needs.
When comparing an instant small loan vs. a credit card loan, the difference between the two is that you get a sum amount upfront for an instant small loan. This is not the case with a credit card loan mostly used for purchases. Additionally, it is a personal loan without CIBIL and with these short-term loans, you only make repayments via pre-defined EMI over the loan tenure.
Instant small loan apps vs Credit cards – which one is better?
Both salaried and self-employed individuals with a minimum monthly income of RS 20,000 or above can use instant loan apps to raise immediate money. No collateral is required as instant small loans are unsecured loans and require no guarantee.
On the other hand, if you prefer credit cards over personal loans, remember you can avail yourself cash in hand through instant small loans but not with credit cards.
With instant small loan apps, you can know about your EMI in advance according to the plan of your repayments. At the same time, credit card bills are unpredictable and complicated with the increasing interest rate every month.
A smart borrower will mostly pick the instant small loan app, like Lenditt, as you can consider it to be the best loan app in India, over a credit card. As the confidential details in the instant loan app is secured, whereas with credit cards the problem is of misplacing it or the card getting damaged, and applying for a new one would take time.
Undoubtedly, credit cards are quite handy, but instant small loan apps give individuals the power to get easy urgent cash loans without documents in just a few steps.
In the lockdown scenario, you may have seen a lot of people struggling to pay their credit card bills. At the same time, personal loans for salaried employees from instant small loan apps are sanctioned with a limited amount which is not hard to pay in a period of time mentioned by the lender.
From an overall perspective, credit cards and instant small loans seem the same. While you can borrow funds and make repayments, the differentiator is the interest rates charged to the consumers by credit card companies and the instant small loan apps.
Credit card vs. small instant loan- which one is better? This is indeed very difficult to decide. A lot depends on your needs, perspective, and circumstances to determine a clear winner.