3 reasons why you should take a personal loan instead of opting for a credit card

People these days believe in luxurious life. According to them, one needs to earn money in order to fulfil their desires or dream apart from their basic necessity. Today’s society is competitive in nature. People are always competing with others in terms of their standard of living.

Although competitive but not everyone is capable of buying expensive goods or services. The people with lower income find it difficult to afford such luxurious things. So what should they do?

For every situation, there is an alternative available. One needs to find one.

Personal loans and credit cards are the best alternatives to get yourself rid of the burden of paying money at once to buy any luxurious thing of your choice or your dream.

What are a personal loan and credit card?

A loan can be defined as a sum of money borrowed by an individual from any financing Company or organization on fixed small charges. A personal loan is more specialized form of a loan, which is borrowed for one’s personal needs at a fixed rate of interest with a fixed repayment time period. The personal loan can be provided by any bank, private lender or credit union. Before applying for a personal loan one can analyse the interest rate using a personal loan eligibility calculator. It will help in easily understanding of the loan prospects.

Credit card is another method of buying things by borrowing money. But its way of functioning is slightly different than personal loans. Credit cards are small plastic cards used for buying goods and services on credit. The term Credit means buying first and paying later. Credit cards are just like your monthly electricity bills, issued by banks, in which you can shop the whole month and at the end of the month you are required to pay the credit bills.

Why choose a personal loan over credit cards?

Personal loans are more favourable over credit cards, which can be understood by the following points mentioned below.

  • Impact on your credit score

The credit score is one of the most reliable factors that is considered while lending you the loan amount. It is completely based on your utilization ratio. More you buy the higher your utilization ratio which will ultimately lower your credit score. Therefore it is advisable to opt for a personal loan as they offer a specific amount which will be easier for you to spend accurately after figuring out your expenses properly. Although limits are set in credit cards, these limits are higher and there is a possibility of spending all money reaching your limits at the end of the month which will ultimately decrease your credit score.

  • For instant cash requirements

They may appear a situation where you need to pay in cash. Personal loans are suitable for situations involving cash transactions. As with credit cards, you won’t be able to withdraw cash whenever required. You can also check if you’re eligible or not by the help of several online personal loan eligibility calculator.

  • Lower Interest rates

The rate of interest in the personal loan is more conductive and low as compared to your credit cards while paying your debt. The rate of interest for a personal loan can easily be checked by using a personal loan eligibility calculator.


There are lot of calculators available online out of which Personal loan eligibility calculator by Upwards is amongst the best personal loan eligibility calculators that can be used to analyse or compare the interest rates charged in a personal loan. One should choose wisely considering all the prospects before opting for any method of loan as mentioned above.