Friday, October 20th, 2017
Credit Card Vs. Festival Loan
Credit card purchases during festivals include lucrative discounts, reward points, cash back offerings and easy EMI options, but going overboard with your credit card could land you in a debt trap. With seemingly generous credit card deals around, it is easy to get lured to overspend. It is essential, therefore, to understand your borrowing needs and future cash flow, before you decide between a credit card and a personal loan. Exclusive credit card discounts, however, can be limited to a particular retailer or the bank credit card. A credit card EMI includes a processing fee and surcharge by the bank that escalates the overall cost of your purchase. For some consumers, cash back schemes can lead to impulsive purchases that can affect their financial well being in case of any missed payment. If you miss a payment, you need to pay both EMI interest and outstanding amount. You also end up spoiling your credit score, which can affect your chances of getting a future bank loan. Although credit card loans appear attractive on a monthly basis, they are charged annually, making the interest go higher than any personal loan. Credit card loans have a flat rate of interest of 10-18%, whereas festival loan offers have reducing balance rates, which mean your interest will decrease with a reducing principal. Festival loans in India are available from 10.75% onwards, but the exact interest rate differs from bank to bank. You need a bank account to avail a festival loan. When the quantum of the loan amount is your criterion, a credit card loan is useful for smaller purchase amounts to be repaid quickly. A festival loan, on the other hand, is the savior for higher loan amounts due to credit limits on credit cards. Credit card loans give you the option of lower tenures of 3, 6, or 9 months. Banks provide a festival loan for a minimum of 12-24 months. Both types of loans have a processing fee of 0.1-5% as well as a pre-closure charge of 2-5% on the outstanding principal amount. Credit card loans are disbursed faster within 24-48 hours as compared to personal loans which may take up to weeks in some cases. Credit card loans are readily available; you can call the customer care number for a loan credit. Festival loans from banks require additional time due to documentation and credit checks, and the application process can take 48-72 hours or more. An alternative borrowing option, when you need to avoid high-interest credit card EMIs, or you do not qualify for a bank loan is a loan app such as CASHe. FinTech lender CASHe offers festival loans at fair priced EMI plans and are extremely handy when you need quick cash. CASHe gives you secure installment benefits and can be your fastest source of money — in a hurry. The entire loan application procedure completes on the app, and you can get a short-term personal loan credit up to 1 lakh. Festival loans from CASHe are hassle-free with minimum documentation work and do not involve credit checks. You can apply for an instant cash loan from your mobile on the go and receive a credit in your bank account in minutes. So why are you waiting? Get the instant loan app CASHe on your smartphone now and become festival ready.