Personal Loan vs Credit Line- Whenever you need money in an emergency, personal loans and credit lines are very useful. In a personal loan, you have to keep paying EMIs, whereas in a line of credit, you only need to pay the interest. You can pay the principal later. Whether you should take a personal loan or a credit line depends on your needs and the options available.
Therefore, if you also intend to take a loan, then you should take a look at the advantages and disadvantages of personal loan and credit line. Credit line or line of credit is more flexible than personal loan and is also cheaper than credit card loan. On the other hand, if we talk about interest, then the interest rate of personal loan is less than credit line.
Personal loan
Most people take personal loan in emergency. It is easily available. Its interest is also less than credit card and credit line loan. In personal loan, the bank puts the loan amount in the account of the borrower at once. It is paid back to the bank through EMI. The bank starts paying interest on the entire amount of personal loan as soon as the money is put in the account, even if the loan taker has not withdrawn the amount from his account.
Credit line or line of credit
Credit line or line of credit is more expensive than personal loan. The special thing about credit line loan is that after approval, it can be withdrawn from the account any number of times. You will have to pay interest on the amount you withdraw.
The bank will not charge interest on your approved loan amount lying in your account. It will charge interest only when you withdraw and spend it. The repayment options are very flexible. The loan can be continued by paying the interest on the loan amount without depositing the loan amount.
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