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7 Key Benefits of Obtaining Personal Loan over a Credit Card!

Benefits of Personal loan

By Charles YeePublished 4 years ago 5 min read
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Both personal loans and credit cards are availed to fulfil money borrowing needs and they almost have the same criteria for approving a loan. The arrangements of both loans involve detailed interest rates, monthly payments, underwriting conditions, amount limits, and many more. But not properly handling either type of credit can generate problems and also leave a bad impact on credit score. Furthermore, both are also featured with some different properties along with numerous pros and cons.

But, what key benefits are associated with personal loans over credit cards?

Probably, every person is aware of a private personal loan in Singapore and its various benefits. Such types of loans are obtained from the bank or money lenders in order to handle the monthly expenses. Instead of borrowing money from friends and family, a personal loan is an effective solution to borrow money without too much of a hassle.

Whether it is about medical expenses, wedding ceremonies, travelling with friends and family, home improvements, study abroad fees, or short-term cash, a personal loan can make it convenient for you to access it quickly and easily. This is also a comfortable option as you can repay it over a period of time in pocket-friendly installments and arrange immediate disbursal with little or no paperwork.

Secured and unsecured personal loans are frequently accessible among judicious borrowers too. So, let's have a look at the following benefits of personal loan.

Benefits of Obtaining A Personal Loan Over Credit Card

1. Consolidate Multiple Debts

The interest rates available on personal loans are generally lower than the rate paid by borrowers on their existing credit cards. Because of this, the lowest personal loan in Singapore is often used by consumers to consolidate debt from multiple high-interest credit cards into one monthly payment at a lower rate. The interest saved each month can then be applied to the balance sheet to help pay off debt faster. This does not only apply to credit card refunds. Any debt that is at high-interest rates would be a candidate for this strategy.

2. Handle Big Purchases or Expenses

Personal loans can help with big purchases or spendings like weddings, moving expenses, long family vacations, and even medical services. Obtaining financing through a personal loan rather than a credit card for these purposes can provide benefits. Often, the interest rates available through a personal loan are lower than the rate on a credit card. In many cases, personal credit limits are higher than those associated with credit cards. In addition, a fixed monthly payment amount for a personal loan facilitates budgeting and facilitates quick debt repayment.

3. No Limit in the Use of Credit Funds

Personal loans can be used to fund personal affairs, including personal projects and small business ideas. However, if you are into photography, exotic pets, or travel, a consumer loan can help you finance your passion. In addition, if your interests are turning into a profitable enterprise or you feel the need to start a small side business, this type of lending may be the right option. Since the lender only considers your credit rating and income to determine eligibility, you can avoid unnecessary complexity and liabilities for a business loan.

4. Fast Approval and Instant Access

The approval of online personal loan applications is much faster. The terms and conditions of these online loan applications are very manageable and straightforward. Once you apply through for the application online or app, a loan decision will be made within seconds and you will obtain an instant cash loan faster on your app. Furthermore, it is also true that everyone is concerned about their privacy and security when it comes to the mobile loan application form. However, these mobile or online applications are safe and secure with 100 % reliability. You may not face any risk regarding losing your money as the portals are featured with a secure password. This means you can protect your personal information.

5. Constant Access to Money and Information

With the service of 24/7 availability, every borrower can access the cash easily on their phone. In addition, the borrowers can also make an immediate transaction in their bank account at any time of the day. The amount of personal loan is always available to you in order to handle the personal expenses whenever you want. Furthermore, with an easy to track feature, the mobile loan apps are always availed to provide a flawless user experience to borrowers. This means you can check your details to determine how much debt has remained in your account, how much you have borrowed, and what your payment dates are.

6. Predictable Repayment Schedule

Usually, personal loans are also known as installment loans with repayment terms, fixed interest rates, and monthly payments. While approving the loans, the licensed moneylenders will provide detailed information on every terms and condition. So, you will learn how much you need to repay on a monthly basis and how much will be your total interest rate in the duration of the loan. On the other hand, credit cards and home equity loans are not counted as safe and predictable. The expected monthly payment will depend on the utilization of credit. But, the interest rate will fluctuate by the benchmark standards.

7. Collateral Is Not Required

Various unsecured loans do not require you to put up collateral. The outcomes of defaulting on an unsecured loan are severe but the loss of a vehicle, house, or priceless family heirloom is not among them. A personal loan might make sense in this situation. Plus, if you do not need a large amount of money, or want to get funds quickly, this might also be the right choice.

Wrapping Up!

Personal loans can be an acceptable solution for many borrowers, especially those whose needs go beyond the rigid standards of a traditional mortgage, bridging loan, car loan, or business loan. Generally, the personal loan interest rate in Singapore and other countries are less. They also make sense when you need money quickly, or if you want to set monthly payments. They provide the flexibility that many borrowers want as a short-term solution to their financing needs.

personal finance
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About the Creator

Charles Yee

I’m Charles Yee, working as a Director and content writer at Cash Direct LTE, well known licensed money lender in singapore offering wide range of wedding loans, study loans, home loans, car loans, and other financial schemes.

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