Know Why you should avoid taking loan on a credit card and what is best option?

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On one hand, in the Corona epidemic, there has been a crisis on employment and earnings, on the other hand, the health budget of most households has deteriorated. Income has reduced and expenses have increased. There is a lockdown in the states due to Corona. The markets are closed and many people have stopped earning.

In such a situation, if the money is suddenly needed, then the man considers a loan. In this, the first person thinks of a loan on a personal loan and a credit card. According to experts, the loan is already approved on the credit card. So I get it in a day. At the same time, personal loan takes 3 to 7 days. So a man takes a loan on a credit card. But it should be avoided

Credit card loan is expensive

The interest rates of banks and ABFCs offering personal loans are close to 10-24 per cent per annum. The effective interest rate depends on various aspects of the profile of the loan institution and the applicant. Such as credit score, monthly income, job profile and company profile. At the same time, credit card loans are very expensive. Credit card interest rates come from 35 to 40 percent annually. The same bank will charge you 15% per annum on a personal loan, but the same bank charges up to 40% on a credit card.

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Personal loan limit higher

There are pre-approved loans on credit cards. Their amount is less. At the same time, a personal loan can range from 50 thousand to 25 lakh rupees. So a personal loan proves helpful for large expenses. Processing fees are also almost equal for both types of loans. Therefore, B does not make much difference on the loan amount.

Loan on LIC is also a better option

If you have life insurance then you have another better option of loan. LIC provides loans at low interest rate to its policy holders. In this, you should be a two-year old insured. Also, the policy type is being submitted at the right time. The loan amount is decided on the basis of your LIC policy. LIC decides how much loan you will get.

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