Compare Home & Personal Loans, Credit Cards and Broadband (2024)

FAQs

What is the difference between a personal loan and a home loan? ›

The major difference between a home loan and a personal loan is that a personal loan is unsecured, which means it doesn't require collateral. Banks and non-banking financial companies such as Bajaj Housing Finance Limited offer both home loans and personal loans.

Loans are typically used for a large expense or debt consolidation. A credit card is a revolving line of credit, meaning you can repeatedly borrow funds up to a predetermined threshold called your credit limit.

Generally, your credit card is good for making smaller, day-to-day purchases and paying off smaller amounts faster. If you're needing to make a big purchase, finance a large on-time expense, looking to consolidate your debt or needing more time to pay back the money - a personal loan is better suited.

The biggest difference between a personal loan and a credit card is that with a personal loan you're given a lump sum upfront, whereas a credit card you're given a limit that you can spend up to. Both have their advantages and disadvantages.

You're looking for low rates: Home equity loan rates are typically lower than personal loan rates, meaning your monthly payment will be smaller and you'll pay less for borrowing money. You want to renovate your home: If you use your home equity loan funds for renovations, you can deduct the interest paid on your taxes.

A Personal Loan is money you borrow and pay back with a high or low interest rate over multiple years. However, a Personal Finance is a Shariah-compliant product designed to provide you with liquidity based on the Shariah concept of Murabaha (cost plus profit). Thus, this product is riba-free.

Personal loans have relatively lower interest rates than credit cards, but they must be repaid over a set period of time. Credit cards provide ongoing access to funds and you only pay interest on outstanding balances.

Secured loans are typically a more affordable choice as they are backed by collateral and have lower interest rates than unsecured loans.

Credit Card vs Personal Loan

A Credit Card loan is an unsecured loan that requires no collateral of security. A Personal Loan is an unsecured loan. However, you need to prove your capability to repay it. It is a pre-approved loan, there is no documentation needed to avail of it.

Personal loans carry fixed interest rates while personal lines of credit usually have variable rates over time — it'll depend on the change in the prime rate set by the institution lending you money. But for the most part, a higher credit score can help you get lower interest rates.

Which loan is best mortgage or personal loan? ›

If you require funds instantly without putting your property as collateral, a personal loan might be more suitable. On the other hand, if you are looking to buy or refinance a home and need a substantial amount with a longer repayment period, a home loan would be the better option.

Loans and credits are different finance mechanisms.

While a loan provides all the money requested in one go at the time it is issued, in the case of a credit, the bank provides the customer with an amount of money, which can be used as required, using the entire amount borrowed, part of it or none at all.

A personal loan is usually unsecured, unlike a mortgage, which is always secured by the property itself. Additionally, a personal loan must usually be repaid in a much shorter time frame. Most personal loans don't have terms that allow you to repay the total over the course of 30 years.

If you lose your wallet or get robbed, any cash you were carrying is almost certainly gone forever. If thieves go on a spending spree with your credit cards, however, you generally won't be held responsible for fraudulent purchases.

While it's technically possible to buy a home with a personal loan, it may not be as good an option as a traditional mortgage. Why? Because personal loans tend to come with higher interest rates than mortgage loans. Accordingly, using a personal loan to buy a home may lead to much higher monthly payments.

A personal loan is a type of borrowing with fixed interest, relatively quick funding and predictable payments. You can use personal loans for a wide range of goals, and they can be a good option for consolidating high-interest debt or financing a purchase.

As personal loans are often unsecured, there tends to be stricter credit requirements to offset the risk of giving out a loan without collateral. Higher interest rates and fees: Banks tend to charge higher interest rates and more fees compared to their credit union and online lender counterparts.

A mortgage, or home loan, is a type of loan used to buy real estate, and it's secured by the purchased land or house. Other loans, such as personal loans, aren't restricted to real estate and can help finance various purchases or expenses for their borrowers.