When you need cash now, whether that be for a holiday, new car or debt consolidation to combat all those buy-now-pay-later, there are a few options out there. Both credit cards and personal loans spring to mind as a way to get cash easily and quickly, but that’s not always the case. Let’s take a look at the pros and cons of both and which are better for your finances.

Credit Card vs Personal Loan


Both credit cards and personal loans have a few things is common – they both let you borrow money to get to your purchases faster, they both charge you interest, and you have to pay them both back with agreed minimum in repayments. But they have a few differences too. Let’s take a look.


Personal Loans

A personal loan can be applied for through a non-bank loan provider just like us! Once you apply for a loan and are approved, you are given the loan amount in a cash lump sum into your bank account. This can then be used like cash to make your purchase – whether that be for a new car, a holiday or to pay off your bills. Once you spend the loan amount, that’s it! If you need more cash, you’ll either have to reapply for another loan or in some cases you can easily ‘top up’ your existing loan.


Repayments for your personal loan are made in regular instalments (weekly, fortnightly or monthly) with added interest, but this is a fixed amount each time based on how much you borrowed plus the interest and fees. The friendly Instant Finance team will work with you when you apply for a loan to make sure you understand what your repayments will be so there are no surprises! It’s the responsible thing to do.


Credit Cards

In most cases, credit cards are tied to a bank or financial institution where you’ll firstly need to open an account. You’ll need to apply for a credit card and set a credit limit which is the maximum amount of money you can spend on your credit card. Your credit limit is determined by your provider based on how much money you earn and how likely you are to make the repayments. Once your credit card is approved, you don’t get the money in a lump sum – instead, you can spend up to this amount on the credit card, with any retailer that will accept the credit card. 


If you do not pay off all of your credit card debt at the end of each month, your repayments are calculated based on how much you’ve spent plus the interest, so it’s important to remember your repayments will vary each month and can be tricky to keep up with. Once you make a repayment on your credit card, you can then continue to spend up to your credit limit again (this is called revolving credit, but more on that below!).


Revolving Credit

One of the downfalls of a credit card is that it’s a form of permanent revolving credit. What this means is that unlike a personal loan which is a set amount, as you pay down a credit card, you can continue to make purchases and increase your debt up to your credit limit. This can be quite risky and means it’s easy to get in over your head when it comes to managing your repayments.


A personal loan on the other hand, offers a fixed credit. This means that you decide how much money you need and receive a set amount in cash. Once you spend the cash, you can’t continue to spend and increase your debt without reapplying – and in that case, we will review your financial situation to make sure you can afford the repayments and we’re lending responsibly.



Credit Cards

Personal Loans


·         You can have it on hand all the time for different purchases.

·         If you pay off your credit card debt in full every month you will not attract interest


·         Lump sum paid in full that you can use like cash.

·         Fixed repayment amounts so you can manage your cashflow.

·         Paying the loan instalments when they are due means you will always become debt free



·         Revolving credit means you can continue to carry debt forever even as you make your repayments.

·         Changing repayments each month can be tricky to keep up with.


·         You need to reapply to access more money.


What are your options if you have bad credit?

If you’ve been declined for a credit card from your bank, or you have a history of bad credit, you might be worried about what your best financial options are. Don’t worry – it’s not all bad news!


At Instant Finance, while we take your credit score and history into consideration, we give everyone a chance to apply for and be considered for a personal loan. Our team review each application on a case-by-case basis and see how we can best work with you. Interested? Apply for a loan now and see how we can help!


Thinking of a debt consolidation loan? 

If you’ve found yourself with a few credit cards on hand, overdrafts that you just can’t pay down or even buy-now-pay-laters that are getting out of control, a debt consolidation loan can help you take the pressure off.


Juggling all the different repayments can be tricky, not to mention stressful, so a debt consolidation loan is a way to simplify your finances. We can help you roll all your debts into one easy to manage loan with a fixed interest rate for the life of the loan so you know exactly how much you’ll have to pay each repayment and can even calculate when it will be paid off!

Ready to ditch the credit card?

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