Personal Loan vs Credit Card installment
Today most of the bank such as Citibank, Maybank, Public Bank, RHB Bank, and other oversea bank such as OCBC bank, Hong Leong Bank, JP Morgan, The Bank of Nova Scotia, Standard Chartered Bank all have many credit facilities offer to public. The main offers are personal loan and credit card.
A personal loan, known as an “installment debt” means you receive a large sum of money which you will then pay back in fixed monthly payments. With a lower interest rate than a credit card, personal loans are best used for long-term expenses or larger expenses. It is not true to say that because you have a poor credit history, you will automatically be declined when applying for a personal loan.
Depending on the size (largely financial clout) of the lending institutions, interest rates on various loans have a large range and is dependent on several factors which is based on the borrower’s personal situation.
A credit card is also known as “revolving debt”, you have a pre-determined credit limit set by your financial institution. At the end of every month, you will be required to pay a minimum on the expenses charged to that card (usually 1% to 5%) once that is done, you are free to continue spending on that card.
Most of the bank today offer you to buy any item as long as the credit in your credit card is sufficient, then from there you can change to monthly payment to installment scheme, such as 12 months or 36 months, depend on the seller. Most of the bank now offer zero interest on such facilities, in Maybank this is call EzyPay.
In MintLivin.com we offer maybank monthly installment for products more than RM2,000. That’s the reason our customer Nancy bought her custom made cabinet last month.
When you need to borrow, you might consider a credit card or a personal loan. Credit cards are ideal for short-term expenses that you can pay off in a month, while personal loans are best used for long-term expenses, financing a big purchase or consolidating multiple debts.
Your decision to use a credit card or personal loan will depend on your credit score, how much you want to borrow and how long you have to repay it.
Use a credit card only for purchases that you’ll be able to pay off by the due date, this is very important to remember. Credit cards and personal loans can be used as tools to roll multiple debts into a single payment. If you can pay off your debt relatively quickly and your credit is good enough, a balance transfer credit card may be the best choice. This type of credit card lets you move high-interest debt to a card with a 0% introductory interest rate.