Personal Loan EMI vs Credit Card EMI – Which is Better?


  • Which of the two - Personal Loan EMI vs Credit Card EMI - lowers your cost and gives you the required flexibility?
  • This post gives you an answer - Read it to know the same!

Credit cards come in handy to make purchases and payment in EMIs. But not all transactions can be converted into EMIs. Lenders usually allow instant EMI conversion, and if you want to convert after making a purchase, they would like you to do it within 30-60 days of the purchase. The fact that credit card EMI transactions come at an interest rate of 13%-18% per annum makes one go for it. But personal loan EMIs also come with similar interest rates. So, as a borrower who cares for the hard-earned money, you should compare between the two and choose the right option. Read the post and know how to compare personal and credit card EMIs.

Credit Card EMI

You can borrow funds from your credit card and make a big purchase and convert it into EMI payments. The bank provides you a grace period of 15 to 25 days before the repayment starts. You need to pay the EMI as per your credit card billing cycle and choose the tenure which can be 24 to 36 months. And the bank charges an interest rate of 13.00%-18.00% per annum on your borrowed loan. See the table below to know different bank credit card loan interest rates.

BankInterest Rates
HDFC BankAs Applicable
SBI Card14%-15% per annum
Kotak Mahindra Bank12.00%-18.00% per annum
YES BANK13.00%-15.00% per annum
Bank of Baroda10.00%-15.00% per annum

You also need to pay an applicable GST of 18% on the interest amount of your credit card EMI.

Personal Loan EMI

The bank provides personal loans to customers so that they can meet their personal needs. And the interest rate on a personal loan varies from lender to lender. The tenure of your loan is up to 5 years and you can choose to manage your EMI payments. Look at some of the personal loan interest rates of top banks in India.

Why Personal Loans?

Personal loans are an unsecured loan that can be borrowed from a bank or NBFC for varied uses and you can pay it in smaller monthly installments. Using the loan, you can handle medical emergencies, renovate homes, or clear multiple debts. The reason you prefer personal loans is that it meets your unexpected expenses and fulfills household financial obligations. Instant personal loans offer benefits like flexible repayment options, lower interest rates, zero collateral with no limitations on borrowed amounts. Adding to the advantages are its multipurpose usage, adequate loan amount approvals, quick processing, zero security requirements, simple documentation, and flexible terms. On the other hand, due to no security or collateral, the interest rate can be higher than secured loans.

Difference between Personal Loan and Credit Cards

Application Process: Credit cards can be availed from banks or financial institutions. And you can easily convert the high purchases into EMI. No documents are required to borrow a loan from a credit card. On the other hand, personal loans can be availed within 2-3 days of submitting the application with the required documents.

Repayment tenures: Personal loans have a set repayment tenure and can’t be changed. You can pay your loan in 5 years tenure maximum. The lender gives you the freedom to choose the tenure as per your repayment capacity. Whereas, credit card loans have a monthly revolving repayment which allows you to have a grace period of a month to repay before the loan attracts interest.

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Interest rates: Credit card EMIs and Personal Loan EMIs have similar interest rates. The interest rate on credit card EMIs ranges from 13% to 18% per annum compared to 10%-25% per annum in case of personal loan EMIs.

Borrowing limit: The personal loan provides you a high loan amount compared to a credit card because the card can provide you the loan based on your credit limit.

So, after knowing the two loans, you must know which one is best and apply for it to meet your financial needs.

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Personal Loan Interest Rates January 2023
Fullerton India12.00% - 24.00%
HDFC Bank10.99% - 15.00%
ICICI Bank10.50% - 18.00%
IndusInd Bank10.49% - 31.50%
Kotak Bank10.75%
RBL17.50% - 26.00%
Standard Chartered Bank10.75% - 13.00%
Tata Capital10.75% - 18.00%
Home Loan Interest Rates January 2023
Axis Bank7.60% - 8.05%
Bank of Baroda7.45% - 8.80%
Citibank6.65% - 7.40%
HDFC8.60% - 9.60%
ICICI Bank8.75% - 9.80%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.30% - 8.90%
LIC Housing8.65% - 9.75%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.35%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI8.00% - 8.55%
Tata Capital7.75%