Personal Loan Interest Rates vs. Credit Card Interest Rates: Which Is Better for You?

When it comes to borrowing money, most people face a common choice: personal loan or credit card. But before deciding, it’s crucial to understand how personal loan interest rates compare with credit card interest rates, and which one is right for your needs.

What Are Credit Card Interest Rates?

Credit cards offer a quick way to access credit, but their interest rates can be very high, often between 24% to 48% per annum. If you don’t pay the full amount by the due date, you’re charged this high interest on the outstanding balance.

What Are Personal Loan Interest Rates?

Personal loan interest rates are generally much lower, ranging from 10% to 24% per annum, depending on your credit score, income, and lender. Personal loans are disbursed as a lump sum and repaid in fixed monthly EMIs.

Side-by-Side Comparison

When to Choose a Personal Loan

• You need a large amount for things like a wedding, home renovation, or medical treatment

• You want lower and fixed EMIs

• You prefer structured repayment

Personal loan interest rates are more affordable for long-term or high-ticket borrowing.

When to Use a Credit Card

• You need small, short-term credit

• You can repay in full by the due date

• You want to earn rewards or cashback

⚠️ Carrying a balance month-to-month can make credit cards more expensive than personal loans.

Pro Tip: Convert Credit Card Dues to Personal Loan

If you’re unable to pay off your credit card dues in full, you can take a personal loan to clear the balance. The lower personal loan interest rate will reduce your burden and help you pay off faster.

Final Verdict: Which Is Better?

• Choose Personal Loan 👉 for larger amounts, longer tenure, and lower interest rates

• Choose Credit Card 👉 for short-term use, quick payments, and if you repay in full every month

Both are useful in different situations—but if you’re comparing the interest rates, personal loans win hands down.

Get Expert Help

At Fundcera, we help you find the most affordable personal loan interest rate in India with instant approval and no hidden charges. Choose wisely and borrow smartly with our expert support.