There are more credit card providers in Bangalore than schools and hospitals combined. Thousands and thousands of people rely on credit cards to make ends meet. The allure of easy and ‘free’ money which they incessantly advertise on every medium possible is irresistible to people. Personal loans on the other hand are not easy to get. Passing the banks’ eligibility criteria is not feasible for everyone. New age Fintech companies have a knack of finding such gaps and bridging them. A few years ago, quick personal loans were a distant dream and credit cards enjoyed a free reign. Now certain startups are challenging the biggest players (credit card companies) in the finance niche by offering people smart loans.
Credit Cards – The Journey So Far
There is a reason why credit cards became so successful in the 90s and even 2-3 decades later, people are still enamored by the endless possibilities of owning a credit card or two. Credit card dues come with hefty interest rates that even if it gives financially-crunched individuals to get cash in a pinch and reimburse it with their next salary. Salary to credit card to salary – it is a vicious cycle of debt-traps. Another reason why credit cards became popular was the difficulty common people faced in those days when they tried to get loans. Swiping means less headache albeit the high rates. But this is not the case anymore.
Comparing The Benefits Of Credit Cards & Personal Loans
Using your credit card is beneficial only if you manage to pay off the dues in a stipulated time. If this is not possible, then it is better to search for other options. There are many Fintech firms with tie-ups with banks that help customers avail personal loans in a day. Digitalization made it possible to rush through the paperwork accurately and give the best quote to customers. This is a recent phenomenon and people are slowly warming up to the idea that there are better alternatives to credit card loans even in an emergency.
We are not telling you to lock up your credit cards in a trunk and throw away the key. They do have their uses, after all. Using credit card to pay for grocery shopping, dining out etc. is packed with perks. Every buck you spend fetches you cash points or rewards. This can be accrued and used later. But credit cards have a way of luring you into naïve complacency when it comes to spending.
Personal loans help to keep you more grounded. They make sure that you can afford the EMIs through employment and CIBIL score verification. And the interest rates can be anything from 14% to 24%, which is still nowhere close to those levied by credit card companies. Startups are coming up with innovative digital penetration to sift trustworthy customers while bringing down the expenses related to lending.
Eligible personal loan applicants may be able to avail up to INR 5,00,000, which are unsecured. The mortgages are for a preset tenure (between 12 and 36 months) to be settled in equated monthly installments. Does this sound too complicated? It doesn’t, right? Then do opt for smart and quick personal loans rather than pile up your credit card bills.