Which describes the difference between a personal loan and a credit card? credit cards offer lump sums of money, while personal loans set a maximum amount a person can borrow. credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases. personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow. personal loans are secured for small purchases, while credit cards are unsecured loans for large amou

Credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases.

Further Explanation:

A Personal loan is usually an unsecured loan that a person can avail for various purposes which may range from medical reasons to expensive purchases or a vacation or even sometimes an applicant can apply for a personal loan for the debt consolidation. Just because personal loans are unsecured loans, the interest rate charged on them is relatively on the higher side as compared to other loans. Credit card loans pre-approved loans and require minimal document verification.

To attain unsecured credit, one must apply for the loan on credit card as it is the fastest way to achieve unsecured credit as a certain amount of money that falls under the limit of Credit card is offered as a loan. The main difference between a Personal loan and a Credit card loan is the amount disbursed under it. In a personal loan, an applicant can apply for a huge loan whereas, in a Credit Card loan, the applicant will get a loan based on the limit of the card.

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Answer Details:

Grade: High School

Chapter: Loans

Subject: Finance

Keywords: Credit cards, Personal loan, Interests, Documentation, Pre-approved, money, disbursed, unsecured credit, applicant, medical reasons.

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