How is a Personal Loan different from a credit card?
Both Personal Loan and credit card allow the customer to make large purchases. A Personal Loan allows the amortization of the loan principal into small monthly installments over a long period. In contrast, a credit card does not have a set tenor, and requires a minimum payment of 5% of outstanding bill. Failure to pay the minimum will result in a late payment charge. In this case, the credit card’s minimum payment is roughly equivalent to the monthly installment of a personal loan. Each timely repayment helps the customer build up CBC payment records.