Whenever there is a requirement for instant cash to manage various expenses which might be required for household needs like home renovation shopping, travelling and others, you can choose various options that can help to get the cash. However, there are other options also that can help you accomplish certain works like bill payment, and online shopping, and these can be done via credit card. However, the arrangement of cash can be done through a line of credit or a personal loan. These are distinct from other loans because of independence in their usage. Even after that, there are some differences in the line of credit and the personal loan and these are as follows.
1. The approval process
Line Of Credit: The approval for the loan amount is fixed like the credit limit where you can borrow within that limit and therefore you don’t have to wait for the approval while getting the line of credit, especially for urgent requirements.
Personal Loan: Whereas, the personal loan amount is approved as per the credit score and the income of the borrowers. There is application, verification, approval and then disbursal process. Therefore, the personal is different from the line of credit in terms of approval.
2. Maximum loan amount
Line Of Credit: The maximum loan amount in the line of credit is decided once when the document verification is done and one can borrow anytime within that limit. And for that, you don’t have to get the approval again and again. And as per your need, you don’t have to wait for the approval after the application
Personal Loan: In a personal loan, the loan amount is often changed and with the loan application, you have to accomplish the process again and again whenever you go for the borrowing. Therefore, it might time take compared to the line of credit.
3. Difference based on the tenure
Line Of Credit: The line of credit has often lower tenure where you might have to pay in a short period. However, in some cases like credit bills, you might have an option with the EMI that can enhance your repayment amount.
Personal Loan: Whereas, the personal loan tenure is fixed on the affordable condition where you can choose the loan based on EMI or a short-term loan with a one-time payment. In this case, you have freedom of repayment without any difficulties. And it is different and convenient from the line of credit.
4. Interest and charges
Line of Credit: The interest of the line of credit may be higher as it is easily available i.e., once approved you can borrow without any approval.
Personal Loan: The interest on personal loans is fixed and lower compared to the line of credit. It is convenient to repay. However, it takes time for the disbursal, but in many ways, it is better.
Conclusion
Overall, there are various ways of borrowing where the line of credit and the personal loan are the best options. With their distinct features and benefits, it is always beneficial to get the arrangement of cash. With some changes and features, it can be clear while understanding the line of credit meaning and also its difference from a personal loan.
After that, it’s your decision and choice which option you are choosing for borrowing or the arrangement of instant cash.
