Head-to-Head: Credit Card vs Personal Loan

3 min read By Kevin Joshua Ng on

Both credit cards and personal loans are outstanding financial products that can open up opportunities for you. Learn more about what makes them unique so you can take advantage of their features by the time you need a financial boost.

What’s the Difference Between a Personal Loan & Credit Card?

Perhaps the most notable difference between a personal loan and a credit card is you get to keep a physical card in your wallet while the other comes in a check. But when it comes down to basics, personal loans and credit cards have more in common.

Personal loans and credit cards basically offers you unsecured loans, meaning you don’t have to exchange something you own in return for additional liquidity. Providers only expect you to pay them at a certain date with interest.

But that also means the application for both personal loans and credit cards can be tedious. Banks and providers go to great lengths to ensure that you, as a borrower, meet specific requirements to be approved for their products.

If you want to learn more about the application process and how to increase your chances of approval for both personal loans and credit cards, you can check out these guides:

Read: How To Get Approved for Personal Loan In The Philippines?

Read: How to apply for a credit card in the Philippines?

When should I apply for a personal loan?

Personal loans typically offer a higher loanable amount compared to the credit limit on credit cards, depending on your disposable income. So if you need cash quick for big undertakings like tuition fee payment, debt consolidation, home renovation, international travel, or down payment for a new vehicle, personal loans will be a better option.

Most personal loans also have a lower monthly add-on interest rate and staggered monthly payments vs. credit cards. However, since personal loans have a higher risk-to-reward ratio for loan providers, the application and approval process is typically more stringent compared to credit cards.

When should I apply for a credit card?

Credit cards are a more “accessible” financial product vs. personal loans, so it’s a good option for smaller and more frequent expenses. With credit cards you can pay for bills, groceries, and your gas while earning rewards and rebates.

But unlike personal loans, you need to pay off your credit card balance in full every month or at every cycle. This means you have to be able to pay your expenses fully to avoid interest rates and additional fees. If left unchecked, your balance can balloon beyond your control before you know it.

Credit card companies also offer 0% installment promos on selected items, which can be a very enticing option for consumers.

Can I find and apply for low-interest personal loans online?

Yes you can! At eCompareMo, we can help you find cash loans online from several banks and top loan companies. When you apply for a low-interest personal loan at eCompareMo, the results we provide based on your profile automatically fit your qualifications so you have a higher chance of getting approved.

Apply for a low-interest personal loan now at eCompareMo.com/personal-loan

Can I find the right credit card for me online?

Credit card application is more convenient now with eCompareMo.com. No need to apply at several banks separately over and over again. Just put in your details and we’ll match you with the best credit cards based on your preference, so you’ll be assured that what you apply for matches your lifestyle.

Apply for a credit card now at eCompareMo.com/credit-card.

About the author

Kevin Joshua Ng

Kevin Joshua Ng Kevin Joshua Ng is a digital marketing professional and car enthusiast who has written for In The Garage, a trusted resource for car owners in North America.