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Personal Loans versus Credit Cards

personal loans for bad credit

Personal loans and credit card companies continuously compete to gain more prospects. Both offer fast and low interest loans, which is why clients begin to ask which is ideal for them or which of these two options suits them best. It is a good thing that people have more choices to choose from, because one loan type does not work for everyone. People choose where they can benefit, and where they can save from interest rates. They don’t just patronize anymore as they are smarter these days.

Personal Loans

Personal loans come in two types – secured and unsecured. One requires collateral while the other one is more accessible. An unsecured loan has a minimum interest rate of 5.99% and the maximum is 15.99%. This is ideal if you don’t want to risk your assets, however you will have to pay higher interest rates. On the other hand, a secured loan charges a minimum of 4.90% and the maximum of 14.65%.  The interest rate is much lower compared to an unsecured loan because you are pledging collateral. The downside is, in case you failed to pay your loan on time, something valuable will be taken away from you.

Credit Cards

Most credit card providers entice clients by promoting interest free credit card deals. These zero percent deals become much appealing to customers. It has been said that 44 credit card companies have this type of offer – zero percent deal for 15 months on purchases. This only shows that most credit card providers are up to the challenge against personal loan providers. The abundance of zero interest rates is an impressive attempt to gain more customers. Personal loan providers must think of a new tactic to win back their customers.

Personal loans and credit cards are two most popular loan providers that compete to achieve more customers. Both these two have good and bad sides and customers must be fully aware of the possible pitfalls they may encounter. Dropping of interest rates sounds good while zero interest deals offered by credit card providers is a much better deal. Customers must weigh the good and bad and where they can benefit. It is not bad to shop around and look for other deals that suit them best. No matter what you choose, make sure that you pay on time and avoid delay or missing a payment for you to maintain a flawless credit card history report.