Short term personal loan or a credit card – Which one would you choose?

Personal Loan vs Credit Card

Nowadays, with the ever going inflation, at times it becomes a little difficult for most individuals in the middle income group to bear even the smallest financial needs. Most of us need some sort of support to manage expenses like taking your family for a vacation, for wedding celebrations, buying a two-wheeler and many others. Most often than not, we tend to our relatives or friends to provide that support, but it comes with its disadvantages, and often ruins the relationship you have with them. At the same time, for a need as small as these do not require a heavy liability like a personal loan, which brings us to a small ticket loan also known as a Short term personal loan.

A short term personal loan is a unique arrangement where a borrower can opt for a small ticket loan for a shorter repayment tenure which is less than 12 months. The idea behind a short term personal loan is to allow borrowers not to have a bigger liability in case there needs can be fulfilled with a lesser amount and for a short duration of time. As the repayment period is quick, the lenders are also supportive of providing such loans which can be repaid easily and the chances of default are at minimum.

Here we have curated a list of premium lenders who provide short term loans at a minimal cost to the borrowers, in making this list we have also considered that the entire process of availing a loan is concise and hassle free.

The most trustworthy short term loan providers as suggested by various users are:

Paysense: Paysense provides loans starting as low as Rs. 10,000 and up to Rs. 5 lakh at an interest rate as low as 1.33% per month for duration of 12 months to 60 months. Someone having a credit score as low as 600 can avail a short term personal loan.

Moneytap: Moneytap started as an instant loan service, now provide short term loans of up to Rs. 5 lakh, the interest rate is applicable annually at around 13%, with no lock-in period, means you can repay earlier than your tenure. Also they allow the interest to be paid only on the borrowed amount and not on the approved limit

Cashe: Cashe became the first 100% digital app to provide short term loans with a 24×7 window, wherein a borrower can apply and avail a personal loan as low as Rs. 1000 at any point of the day. The max loan amount is Rs. 4 lakh, with an average interest rate of 2.5% per month for a period ranging from 3 months to 18 months.

StashFin: StashFin provides various benefits before and after the loan disbursal like a 1500 stashcash as a welcome benefit and also provides a cashback of 1% on every online spend. The loan amount starts at just Rs. 1000 and can be as much as Rs. 5 lakh, the interest is applicable annually at 11.9% for a max repayment tenure of 36 months.

Early Salary: Earlysalary is known for its impeccable 24×7 support and a unique initiative of providing a salary loan to those who are stuck with low cash in the middle of the month. They provide payday loans starting as low as Rs. 5000 and up to Rs. 5 lakh, however the interest rates are a little higher at 18% per annum for a period ranging from 12 to 24 months.

As we discussed earlier, that the prospects regarding a short term personal loan are growing at a rapid pace, most people wonder why not spend on a credit card instead of looking for a short term personal loan, and they do serve the same purpose but here is what’s different between the two of them.

The first reason being the low income criteria, for those who earn around 20k-30k a month, they do not get a decent credit limit to spend, but a short term personal loan can allow them to handle the cash crunch when needed.

And to add to the agony, the interest rates charged on a credit card expense are much higher as compared to a personal loan interest payment. When it comes to withdrawing cash on your credit card, you are supposed to pay an additional interest above the usual rates being charged on your card.

These are the few reasons why people look for a short term personal loan instead of a credit card these days.In case you are looking for the best deals amongst the short term loan providers,