A flexi loan for chartered accountants is a tailor-made offering where you can borrow as you want and repay whenever you have extra cash on you at no additional cost. Interest is charged only on the used amount with EMIs having an option to consist only of the interest component.
Credit cards and a flexi loan for chartered accountants have very similar benefits and offerings. Both these means of finance are unsecured, offer flexibility of use and need basic documents to procure the funds. However, being a chartered accountant (CA) you’re always smart with money and would always want to settle for the best mode of finance. The below-listed parameters will aid CAs in making a sound purchase decision.
1. Financial Objective
The choice between a credit card and a personal loan depends on your financial objectives. If you require funds for meeting daily expenses or monthly bills/ expenses that need to be paid by a due date such as paying for utilities, rent, etc. you can opt for a credit card. If you need capital for long-term needs such as expanding and deploying advanced accounting software, opening a branch office or hiring specialized professional, personal loan is your best bet.
For example, if you need to pay someone in cash, swiping your credit card may not be possible. A wedding in your family may have expenses requiring you to pay mainly in cash, your vendors would prefer payment in cash (you may also be eligible for cash discounts on the same) A credit card comes in handy if you want to pay someone immediately, and don’t have cash on you. A flexi loan for chartered accountants, however, can be disbursed to your account in 24 hours and helps you achieve your short or long-term personal and professional goals.
2. Repayment Ease
Before opting for a loan, you need to figure out the repayment strategy. While a credit card offers you instant funds, it comes with a short repayment tenor. Usually, you have to pay the outstanding bill on your credit card by a month.
Contrasting to this, a personal loan offers you a longer tenor. The repayment tenor for unsecured personal loans for CAs, ranges from 12 months to 96 months.
A wide tenor gives you the option to spread your EMIs according to your income, making repayment a hassle-free process. It gives you the peace of mind as far as repayment strategy is concerned. With online access, you can easily track your loan activity from anywhere within a few clicks.
3. Amount of Money
The amount of money approved in a personal loan for a CA is much higher than the credit limit offered by credit cards. If you apply for an unsecured CA loan, the loan amount can go up to as high as Rs. 55 lakh. For secured loans, the amount can go up to Rs. 55 Lakh.
Procuring such a huge amount of money through a credit card is a tall order. The credit limit on a credit card depends on factors such as:
- Gross monthly salary
- Debt-burden ratio
- Spending patterns
- Credit policy of the lender
For addressing your long-term goals, you need a huge amount of finance which can be easily. You can do so only done through personal loans.
4. Rate of Interest
Rate of interest is one of the prime considerations before choosing a finance option. A high-interest rate pushes up your expenses, affecting your monthly cash outflow.
Credit cards are one of the most expensive means of financing. As soon as you withdraw cash from your credit card, it is charged at a very high rate of interest.
For point-of-sale payments, the interest rate remains high if the outstanding bill isn’t cleared by the due date. Flexi loans for chartered accountants has a more competitive and lower rate of interest than credit cards, thereby, making them more affordable. This ensures that the loan is not a financial burden, as you can easily gauge your EMIs every month.
A flexi loan also helps you keep a check on your monthly expenditure and minimises chances of you over-spending.
The Choice
The table given below summarises the key difference between a credit card and a personal loan.
| Parameters | Credit Card | Personal Loan |
| Financing Objective | Short-term needs | Long-term needs |
| Ease of Repayment | Low | High |
| Loan Amount | Small | High |
| Rate of Interest | High | Low |
| Scope of reduced monthly expenditure | Low | High |
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