With too many financial options available today, it is quite tricky to choose which stand the best the personal loans or line of credits. Before we start to discuss about these two basic borrowing options let’s have a quick note on what is a personal loan and what is line of credit? We are in need of finance now and then and until we live. It is the main product of our livelihood that helps us to cater all our needs like food, clothes and shelter. Some need it basically to renovate their house, perform child marriage, pay medical bills, or even to manage their children’s education fees. It is widely used for different purposes which are common as well as uncommon. It is prime responsibility of the customers to check which one is best option personal or line of credits.
Both are having advantages as well as disadvantages, but making one wrong decision can lead you to suffer a great loss and bit expensive. Plan accordingly to save your borrowed money worth €1000to avoid paying extra fees and high interest rates. Coming to Personal loans it can be borrowed from any financial institution or bank but has high rate of interest and need to be paid on time in fixed monthly installments for a scheduled period of time. Whereas the line of credit is free to borrow the money once you had paid off the old debt and are in line. You need not pay the interest on the sum credited into your account which you had not touched at all.
How to compare personal vs line of credit?
When we are supposed to make comparison between personal and line of credit it is important to research about the two loans which provides €1000flexibility when you are borrowing money for personal use or on a professional front.
Long term loan: The tenure of repayment for personal loans is predetermined say one to seven years, where at the end of loan period you need to pay the full amount to the lender. But the line of credit is free of time period to repay the borrowed amount and makes you borrow the amount again after repay of older one and is similar to credit card which you can use for any purpose.
Fee charges: Have a thorough knowledge regarding the fee charges of your borrower for the amount up to €1000. The personal loan use to charge high interest on monthly service and the application fees as well. But the line of credit charges only annual service fees and will be less expensive if your credit is limited for which you want to use.
Time of disbursement: The lender approves your personal loan as soon as you agree their terms and conditions and sign a contract with them. With lines of credit you are able to withdraw the amount on ongoing basis as you repay monthly with minimum amount.
Hope you had found answers for all your question as which one is the best option among the two financial borrowers. Arrive at a decision after knowing the good and bad of each personal loans as well as line of credit. They vary in terms of loan repayment, interest rates, tenure, and costs.