Is a Personal Loan Better Than Credit Card Debt?

Is a Personal Loan Better Than Credit Card Debt?

Whether you want to build credit or need money now, a personal loan or a credit card can do these things for you. The question many people have is which one is worse. When it comes to figuring out the answer, this depends on your financial situation. However, if you are struggling with bankruptcy in the state of Tennessee, then consider asking a Tennessee bankruptcy lawyer for help.


One of the most practical reasons for using a credit card or personal loan is building up a strong credit history. The problem is this can go both ways. You can build a strong credit history if you make the monthly payments on time, but a terrible credit score if you miss payments. In other words, these two options can help or destroy your credit score.

A high credit score is not only necessary for buying cars, houses, and making other major financial decisions, but also provides benefits. The higher your credit score, the lower interest rates you have to pay on future loans and credit cards. You also have more options for housing and vehicle purchases.

Now the problem is whether you would rather have a personal loan or a credit card. This can be especially hard when this is all new to you. In its simplest form, a personal loan is a large sum of money you borrow, spend when you want, and then start making monthly payments. Monthly payments break the loan into manageable chunks of cash.

Credit cards also come with a large sum of money, but your spending on a credit card might be spread out over months or years. Like loans, credit cards have interest rates that increase until you fully pay off the money you spent with your credit card.


The top benefits of a personal loan compared to a credit card are being able to borrow more money and you can choose how much you want to break the loan up. If you cannot afford the monthly payments or paying off your loan in three months, you can have your payments spread out over twelve months.

A loan may not be for you if you do not need $1,000 because most lenders do not lend under this amount. The higher your total amount borrowed, the more interest you pay and the more you owe in total.

The benefits of a credit card vary by the card you choose. While you can borrow and owe less with a credit card, you might be tempted to spend more money than you can pay back. This is how people fall into debt.


Falling into personal loan or credit card debt can be hard to escape, depending on how deep you are. Try calling us at Tom Bible Law today at (423) 690-7712 and we can explore your bankruptcy options. Our team of Tennessee bankruptcy attorneys might be able to help you overcome your debt. We can be found in your local Tennessee cities of Chattanooga and Tullahoma.

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