Personal loan vs Credit Card? What should I opt for during Festive Season?

The festive season is a time for cheer and indulgence. Spending money on gifts is not only a tradition in most households but hosting family and celebrating together calls for a bigger budget than usual. When it comes to these expenses, some people opt for taking out a personal loan to fuel their celebration. Others simply get a credit card for the same purpose. Both tools can be incredibly effective ways of making the festival everything you hoped it would be. Here are reasons to consider getting either a personal loan or a credit card this festive season. 

Personal Loan Features and Benefits

A personal loan is an unsecured loan from a financial institution that can be used for most big-budget purchases from funding a vacation to a wedding. This makes personal loans one of the most convenient ways to fuel your celebrations. Here are some standout features of personal loans that make them a great option to consider.

• You can calculate personal loan EMIs beforehand so you know exactly how much debt you will owe your lender. Personal loans offer you the freedom to financially plan the amount but also the debt you will pay. 
• Beyond the feature to calculate personal loan EMIs, you can also pay off EMIs flexibly. You can opt for monthly, or even annual EMI payments, depending upon how flexible your lender is. 
• Personal loans are structured such that you get a spending budget, making them a great option to prevent overspending. You have to ensure all your purchases fit within the loan amount you select. 
• You can receive your loan as a lump sum pay-out making it a highly convenient and quick way to purchase any last-minute items. Be it a festive outfit or traditional decor to furnish your home, you will have money readily available with a personal loan. 
• Your personal loan interest rates are applied to your payable amount annually giving you enough time to pay off your loan amount. The earlier you pay off your personal loan the less expensive the personal loan interest rate becomes for you. 
• With a lender like Tata Capital, you get a flexible tenure and quick loan disbursal making the process of applying for a Tata Capital personal loan as frictionless as possible.

Additional Read: Should you use your Credit Card or Pre-approved Personal Loans?

Credit Card Features and Benefits

Credit cards work like debit cards, except one has to pay back their bank or financial institution whatever they spend from their credit card. There are some unique features of a credit card that distinguish it from a personal loan. These features can allow it to be more suited to your tastes or make it a more frustrating option when compared to a personal loan. 

• Similar to personal loan interest rates, credit card EMI interest rates are also applied to any outstanding payments. The sooner you pay off your credit card dues the less costly the interest rates will be for you. 
• Credit cards are purely for electronic purchases. You can withdraw your credit amount which will then become chargeable as a credit purchase and you will be required to pay EMIs on it. The upside is that all your purchases are online, making them secure and well monitored. 
• Credit cards come with a host of benefits for their users. From a point purchase system to special discounts, credit cards always have a slew of offers going on. During the festive season, there are likely to be ongoing discounts or sales. 
• Even credit cards can be exhausted or ‘maxed out’, similar to exhausting one’s personal loan amount. This way they offer some structure to your spending as you can get a limit placed on your credit card to ensure you don’t go overboard. 

Additional Read: Credit Card or Festival Loans?

Conclusion

The festive season is around just once each year. This time calls for the tradition of coming together and celebrating hope, light, and cheer. Don’t let your finances make the festival of lights duller than you’d like. With its flexible EMI and repayment options along with quick disbursal, the Tata Capital Personal loan is the perfect way to fuel your festivities this year.