Personal loans and credit cards are both common financial tools, but which one is better? It depends on your financial needs. This guide compares both options to help you decide.
Key Differences
| Feature | Personal Loan | Credit Card |
|---|---|---|
| Interest Rate | Fixed | Variable |
| Repayment | Fixed monthly payments | Minimum payments allowed |
| Loan Type | Lump sum | Revolving credit |
| Best For | Large expenses | Ongoing purchases |
When to Choose a Personal Loan
- Debt consolidation
- Home improvement
- Large one-time expenses
When to Choose a Credit Card
- Everyday purchases
- Building credit history
- Earning rewards/cashback
Final Thoughts
Both personal loans and credit cards have their pros and cons. Choose a personal loan for structured payments and lower rates or a credit card for flexibility and rewards.