Personal loans and credit cards both allow you to borrow money, whether for a large purchase that you do not want to pay for all at once or an emergency expense. But beyond their broad usability, personal loans and credit cards have some major differences. Understanding what those differences are, and the unique pros and cons of personal loans vs. credit cards, can help you better assess which one is the right fit for your purposes.

What is the difference between a personal loan and a credit card?

A personal loan is an installment loan in which you receive the full amount in a lump sum upfront. You will then repay that amount in a series of fixed monthly payments, plus interest, over a set period, often years. This offers a sense of predictability, making payments easier to budget for.

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