A credit card gives you access to unsecured finances thereby increasing your spending capacity. However, the same can be said for a loan. Apart from the high amount of funds, you only need a few basic documents to get approval for a loan, as well as a credit card.
But, a Flexi Loan from lenders like Bajaj Finserv is a customized offering defined by its flexibility. You can withdraw from the total loan amount as and when you need funds, and pay interest only on what you use. Apart from this, you can make interest-only EMIs payments too and repay the principal at the end of the tenor. You can also make part pre-payments throughout the tenor at no extra charge.
So, how does a credit card stack up against a Flexi Loan? Read on to find out.
Tackling unique financial requirements
The option you choose depends significantly on the nature of your financial needs. For example, swiping your credit card won’t be an option if you have to pay someone in cash. In a scenario such as planning a wedding, you will have to make most payments in cash. On the other hand, a credit card comes to your rescue when you want to immediately pay someone, but do not have the cash on you.
So, a credit card is ideal to manage daily expenses or monthly bills such as rent and utility bills that need to be paid by a due date. However, a Flexi Loan works best when you need a high amount of funds for long-term or unpredictable needs such as to fund expansion, to buy advanced accounting software or to hire specialized professionals. Moreover, a Flexi Loan for CAsoffers approval instantly, with disbursal within 24 hours. So, you can accomplish your long-and short-term professional and personal goal with ease.
Factoring ease of repayment
A credit card offers instant funds, but comes with a short repayment tenor, usually a month. In contrast, you get a longer tenor of 12–60 months for repayment when you take a personal loan for CAs as a Flexi Loan. This comfortable tenor allows you to benefit from low EMIs, thus making the repayment a hassle-free process. Additionally, you can also access loan details online and easily monitor your loan with just a few clicks.
Consider the amount of funds
The credit limit on your credit card is a sum total of multiple factors such as your gross monthly income, debt to income ratio, spending pattern, and your credit report. So, you may or may not get a high credit limit. On other hand, the loan amount is much higher when you take a Flexi Loan. You get a sanction of up to Rs.35 lakh on unsecured CA loans and get up to Rs.2 crore on secured CA loans when you choose Bajaj Finserv. So, selecting a Flexi Loan for any task that requires significant funding is a wise decision.
Check the rate of interest
When considering finance options, you should carefully analyze the rate of interest that is applicable on the amount that you are borrowing. In this regard, a Flexi Loan for Chartered Accountants is more affordable as compared to credit cards. This is because they come at a nominal rate of interest as compared to the expensive rate that you have to pay if you delay clearing your credit card bill or don’t do so in full. The Flexi Loan’s lower interest rate reduces overall interest payment and makes the option more cost-effective on the whole. Additionally, when you choose to repay the amount you borrow via interest-only EMIs, you can save up to 45% as compared to a conventional term loan.
So, use these insights to evaluate the two sources of finance and pick one that’s ideal for your needs. If you choose to apply for a Flexi Loan for Chartered Accountants, remember that you can do so online to make accessing funds even more convenient.