Users can obtain financing through different channels, some of the most popular being credit lines and personal loans. Therefore, today from Astro Finance we will see the differences, so that you know which financial product best suits your needs.
Personal Credit vs. Credit Line: what differences exist?
Before covering the differences, what is each product specifically? Below we show you its definition:
A line of credit is an amount of money that a financial entity makes available to a customer during a certain time. The client does not receive that money at the beginning, but may dispose of it as needed, through his account or through a credit card.
Normally, on the credit lines a minimum commission is charged on the balance that has not finally been used. Likewise, interest is paid for the amount used.
On the other hand, we have personal credit. In this case, the financial institution gives the client an amount of money at the beginning, with the condition that it will be returned along with some associated interests.
Now that we know what each of these financial products means, what differences do we have? The following are the main ones:
- Receipt of money: one of the main differences between both financial products, has to do with receiving money. In the case of a personal credit, it is received at the beginning, while the credit line can be requested as needed.
- Interest: in personal loans, interest is paid from the moment the money is received. In the lines of credit when the necessary capital is available.
- Interest rates: Higher interest rates are usually associated with credit lines. The loans have them lower.
- Renewal: credit lines can be renewed several times before expiration. The loan does not, but must be repaid on time.
- Term: the term of the credit line is less than the personal loan.
- Type of user who accesses the financial product: credit lines are more common by small, medium-sized or autonomous companies, to have liquidity needs covered. As for personal credit, it is usually requested by any type of user.
Which option is better for me?
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It all depends on your needs. Now that you know the differences between a personal credit and a secure line of credit you have more clear which option suits you best.
If you are not a freelancer or company, the most common is to opt for a personal credit. In this way you can receive the amount of money you need right now and face the payment of a mortgage, a car, a trip … whatever you need!
Request your personal credit
Do you want to apply for a personal loan and do not know where to start? If you want to get up to 50,000 dollars and under the best conditions, we invite you to take a look at our loan website.
To request it, you simply have to download the Astro Finance app on your mobile, connect your bank accounts and, based on your FinScore (the health of your accounts) you can access an amount or another and certain conditions.
In addition, we offer you a personal credit without commissions and in a matter of 24 hours, so you don’t have to wait for your money. By knowing the differences between personal credit vs. secure credit line you already have more clear which option fits what you have in mind. Even so, do not hesitate to contact us if you have questions