The Benefits of Choosing Personal Loans Over Credit Cards
3 Key Advantages of Personal Loans Versus Credit Cards
Need to borrow money? Read on to see why a personal loan may be a better choice than a credit card.
1. Lower interest rates
You're not guaranteed to pay a lower interest rate on a personal loan than a credit card. But usually, that's the case. This especially holds true if you're an applicant with strong credit.
2. Fixed monthly payments
The interest rate on credit cards tends to be variable, which means your minimum monthly payments have the potential to increase from one month to the next. With a personal loan, you're signing on for a fixed interest rate.
3. Protection from credit score damage
Credit card debt, on the other hand, has the potential to hurt your credit score, even if you're making your monthly payments on time. Your credit score won't take a hit by you having that loan beyond the minor drop that results from that initial hard inquiry.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.