Any person can avail a personal loan to tide over a financial pinch they are dealing with in their life. It can be anything ranging from a home renovation expense, education cost, medical emergency, wedding planning, cost of a new commodity, travel expense or other miscellaneous personal expenditure – a personal loan can offer instant financial assistance to anyone in need!
While in case of a person who wants to purchase something expensive immediately or is seeing some sort of instant financial assistance for backing a necessity, a cash withdrawal on credit is a feasible option for them. Owing to the ease of applying for credit cards online and an array of benefits offered by different financial institutions on such cards, more and more people are flocking towards credit cards these days.
A Personal loan or Cash Withdrawal on Credit Card – Your Most Ideal Option
Though it may seem feasible to use a credit card at hand to meet one’s financial expenses, on an overall basis cash withdrawal on credit card can prove to be an expensive option when not repaid at the earliest. Besides its high rate of interest, a transaction charge is also levied on cash withdrawals, which makes it comparatively a more expensive option of availing cash than a personal loan.
When a person has sufficient time at hand to balance out their financial crunch, they should try and opt for a personal loan to enjoy speedy disbursement of the loan amount at a low and comfortable rate of interest and unnecessary extra charges.
It is only at the time of an immediate financial need that the option of cash withdrawal on credit card takes the form of a rescuer. At a time, when a person doesn’t have enough time to raise a personal loan they may apply for a credit card loan and try their level best to repay it at the soonest.
Features that make the personal loan favourable for borrowers
- Instant Loan: One can avail an instant loan of up to Rs.25 Lakhs
- Exclusive Benefits: A personal loan borrower can avail tailor-made loan options as per their financial needs
- Zero Collateral: A personal loan is an unsecured loan; a borrower doesn’t need to have a guarantor to avail a personal loan
- Repayment Period: A personal loan borrower can repay the loan amount through easy EMI option which is stretched over a period of 1-5 years.
- Value Added Services: A personal loan borrower can avail an array of Value Added Services from their lending institution
- Lower Interest Rate: The rate of interest levied on a personal loan is lower than that of cash withdrawal on credit card
The process of availing a personal loan is thorough and follows a meticulous application process. The average interest rate levied on a personal loan ranges from12-22%
Features that make the cash withdrawal on credit card favourable for borrowers
- Personal Loan Conversion: A credit card holder can convert their credit card cash limit into a choice of a personal loan at a time of financial crunch. They are also offered the opportunity to repay the loan amount in the first 3 EMIs without any interest within 90 days.
- Interest-Free Cash Withdrawal: At a charge of 2.5% as processing fee, a credit card holder can withdraw money from their credit card limit without paying any interest on it.
- Purchases into EMIs: A credit card holder can convert their purchases through a credit card into EMIs on any purchase made over Rs.3000
- Reward Points and Discounts: Various reward points and attractive discounts are offered to a credit card holder on their card transactions from time to time
- Strict Security Measures: Various cyber-security benefits are provided to credit card users for the safety of their cash withdrawals through card transactions
- Smooth Paperwork: Anyone can avail a credit card with minimal paperwork and apply for the same online
- Easy Access: During an emergency, a cardholder can instantly withdraw cash on a credit card and tide over their monetary need
The average interest rate levied on cash withdrawal on credit card ranges from 20-40% and also requires the borrower to pay an additional charge for a transaction.
The bottom line is that before deciding upon your choice of a loan, things like your financial need of the hour, the time left at hand to meet the emergency, and your capability to repay the loan amount should be taken into consideration.