Is HDFC Bank Personal Loan Better Than A Credit Card For Meeting Urgent Financial Needs?

HDFC bank personal loan

Financial catastrophes can strike at any point in a person’s life, and it is important to be prepared for them. The quickest ways that come to mind are either applying for a personal loan or using an HDFC Indianoil credit card, right?

But which one should you choose? Relax; I’ll help you out by contrasting these two options.

The interest rate

The interest rates on personal loans are normally within a range of 10 percent to 24 percent per annum. This is because there are a huge number of financial organisations, such as banks, fintechs and NBFCs, which provide personal loans. This range is established based on the financial institution that is giving the loan as well as the many characteristics of the borrower’s credit profile. These aspects include the applicant’s monthly income, credit score, employment profile, employer’s profile, and other similar factors.

On the other hand, if you pay off your credit card amount in full before the due date, you won’t have to pay any interest on the money that you spend using the card because you won’t be liable for any interest charges on that money. If you are unable to settle the balance fully by the due date, the lender may apply hefty financing charges of between 23 and 49 percent per annum. These charges can be avoided by paying the balance in full by the due date.

If you are not able to repay some amount which is actually due, you will attract a late payment penalty of as high as Rs 1,500. Finance charges too will be there, and this step will negatively affect your own credit score too. If you are unable to repay even the smallest amount that is due by the due date, you may be subject to a late payment cost.

The amount of the loan that is authorised

When establishing the maximum amount of loan that can be granted for an HDFC bank personal loan, a crucial factor that is taken into consideration is the borrower’s capacity to make monthly payments as well as the length of time the borrower intends to hold the loan.

It can be anywhere from 50,000 rupees to 25 lakhs; however certain lenders, including banks, fintech and NBFCs, claim they can authorise significantly higher loan sums, even up to 40,000 rupees. The amount of money that can be borrowed can range anywhere from 50,000 rupees to 25 lakhs.

For credit cards, the credit limits assigned to each and every cardholder tend to be determined by the lender on the basis of the current monthly income of the applicant and also their repaying history. The higher the monthly income of the cardholder, the higher the credit limit that will be assigned to the cardholder. The person who is the owner of ahdfcindianoil credit card has the choice of making purchases with the card by swiping it or taking out a credit card loan for an amount up to the maximum credit limit that has been set. The credit limit will be decreased by an amount equal to the amount that is either spent on the credit card or obtained as a loan using the credit card as collateral. Since the credit cardholder makes repayments toward the hdfcindianoil credit card outstanding balance, the credit limit will gradually increase as a result of these payments.

The time needed for processing

Before ahdfc bank personal loan can be reviewed and accepted, the applicant will normally be required to send in a payslip or even previously filled ITR forms in addition to any other required evidence. Due to the fact that the verification process for these documents normally takes some time, the process of disbursing personal loans can take anywhere from two to seven days. However, some lenders have a tendency to claim that they can disburse personal loans a great deal more quickly than others, particularly for pre-approved personal loans which are offered to specific customers. This is especially true in the case of pre-approved personal loans that are offered to particular consumers.

When it comes to credit cards, access to credit is often quick for acts such as swiping the card at POS or for website/online purchases. 

On the other hand, applications for credit facilities such as EMI conversion and credit card loans are often approved on the same day that they are submitted because further documentation is not required for these types of credit facilities. Certain card issuers make the claim that check indianoil credit card loans can be granted almost instantly, and they are the ones who make a claim.

Repaying term

There are a few lenders who offer a shorter term of six months and a longer maximum tenure that can reach as high as even seven years for hdfc bank personal loan facilities. The repayment term for personal loan facilities typically ranges anywhere from one to five years, but it can go as high as six or seven years in some cases. On the other hand,  credit card outstanding dues are always advisable to get repaid entirely by the due date so as to avoid incurring substantial finance charges. This can be done by paying the entire balance off before the due date. This is due to the fact that finance costs are often assessed by credit card companies based on a percentage of the outstanding debt. Those who are concerned that they won’t be able to make the one-time payment in full by the due date have the option of turning their payments into EMIs, the periods of which can range anywhere from three months to five years.

Associated charges

Depending on the lender and the overall amount of the loan, the processing costs that come with personal loans can be up to two-three percent of the whole loan amount. This range is determined by the total amount of the loan. When it comes to credit cards, swiping credit cards does not result in any processing fees. On the other hand, if you take a loan against ahdfcindianoil credit card or choose the EMI conversion facility, there is a significant probability that you will be required to pay processing fees. These fees typically differ from one card issuer to the next.

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