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Credit Card Cash Withdrawal vs. Instant Cash Loan – Which Is Better?

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It’s 2022 and already the third covid variant has arrived, necessitating emergency funds in hand to take care of uncertainties in life. Though many people make use of their savings to meet urgent requirements, others face an acute shortage of funds to meet emergencies. Availing loan during such difficult times is a better option than digging out savings. There are many short-term loan options like instant cash loans, credit card cash withdrawals, which give the borrowers various options to choose from.
 
Though short-term loans are unsecured by nature, they tend to differ across parameters. Let us understand the important features of credit card withdrawals and instant cash loans, to understand which is better suited to suffice funding needs.
 

Credit Card Cash Withdrawal vs. Instant Cash Loan – Which Is Better?

 

Key Features

Credit Cards Cash Withdrawal

Instant Cash Loan

Repayment Period

 Credit card cash withdrawals entail an interest-free period, during which the card holder’s outstanding interest does not get charged Flexible repayment period ranging between 6 to 24 months.

Loan Amount

 As per the borrower’s existing sanctioned credit limit and credit history Rs. 10,000 – Rs. 2 lakhs, few lenders up to 5 lakhs.

Purpose of loan

 Easy credit access for funding various expenses within the credit sanctioned limit Immediate funding for emergency purposes with no restrictions for utilizing it only for a specific reason.

Eligibility

 Both salaried and self-employed individuals are eligible Both salaried and self-employed individuals are eligible

Approval Process

 Approved and disbursed within a few days Approved instantly and disbursed within business hours

Interest Rate

 Higher rate of interest as compared to instant cash loans. The interest amount gets accumulated if the outstanding amount is not paid regularly on a monthly basis Low rate of interest as compared to credit card cash withdrawal.

Documentation

 Mandatory KYC documents Mandatory KYC documents

Eligibility Criteria

 A good credit score and credit history A stable income/salary and KYC documents

EMI Facility

 Available Available

Rewards/offers

 Available Not applicable

Insurance Protection

 Available Not applicable

Hidden Charges

 Applicable Not present

Intensity of Fraud

 High Varies depending upon the credibility of loan apps


Which is the better option - Credit Card Cash Withdrawal vs. Instant Cash Loan?


That would be dependent on the reason for availing of a personal loan in the first place, apart from the loan terms most feasible. The borrower has to compare the instant loan amount that can be availed, rate of interest, loan tenure, penalty charges, or hidden costs between the two options. Credit card cash withdrawal is suited for those borrowers who need small loan amounts and can afford to pay the credit card outstanding before the due date. Otherwise, they would end up paying a high interest plus hidden charges. Instant cash loans are suited for borrowers who have a higher loan requirement as compared to credit card cash withdrawals.
 

Getting clarity between credit card cash withdrawal and instant cash loan is thus important. However, not all borrowers can avail of credit card withdrawals, for them, apps like HeroFinCorp instant cash loan app -100% digital loan facility is a good option. The app provides customized instant cash loans at an affordable rate of interest, enabling borrowers to meet their immediate cash requirements

Frequently Asked Questions

What is a credit card cash withdrawal?

A credit card cash withdrawal allows you to withdraw cash using your credit card up to a certain limit. The withdrawn amount is part of your existing credit limit and comes with an interest-free period.

What is an instant cash loan?

An instant cash loan is a short-term loan that provides immediate funding for emergency purposes. It usually ranges from Rs. 10,000 to Rs. 2 lakhs, with some lenders offering up to Rs. 5 lakhs.

What is the loan amount limit for instant cash loans?

Instant cash loans typically range from Rs. 10,000 to Rs. 2 lakhs, with some lenders offering up to Rs. 5 lakhs.

What is Difference between Cash Credit and Overdraft?

Overdraft (OD) allows withdrawing more than the account balance up to a set limit, primarily for short-term liquidity. Cash Credit (CC) offers businesses access to funds up to a sanctioned limit for working capital needs, secured by business assets. Overdraft and Cash Credit are both credit facilities provided by banks, each serving distinct purposes.


Did You Know

Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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