Several credit card companies offer personal loans. Credit card companies that offer personal loans are also banks that allow you to have checking accounts, saving accounts, money market accounts, and more. As with any lending institution, you will have to meet certain credit requirements in order to qualify for a loan.
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In some cases, if you are someone with less than perfect credit, but you have a long-standing relationship with the credit card company with proven long-term on-time credit card payments, they may be willing to give you a loan despite your lower credit score. However, this loan is likely to be a much smaller loan that if you were to have great credit.
What credit card companies offer personal loans?
Capital One is the perfect example of a credit card company that also is a lender. Capital One is a bank and a lending institution. They provide car loans, home loans and personal loans on a regular basis. In fact, according to Capital One, they are the number one lender for car loans in the United States.
Capital One does offer personal loans for people with less than perfect credit. Naturally, the interest rates will be much higher than if you had great credit. In addition, Capital One will require you to provide proof of income for the past six months as well as reviewing your credit report.
HSBC is another credit card company that also loans money. As a bank, they have checking accounts, saving accounts and so on as well as providing home loans, insurance, and many other services. As with Capital One, they do have loans for people with less than perfect credit. In addition, the better your credit, the lower the interest rates.
Many banks do consider a credit card an offer of a personal loan. As such, you could technically say that every credit card company offers personal loans.
Is it better to get a loan from a credit card company or from a traditional bank?
Actually, this is a personal choice. You will find that some banks have better terms than some credit card companies have and vice versa. What’s more, you may find that some credit card companies have a little more flexibility when it comes to lending to people with less than perfect credit.
Your best bet is to compare loan offers or option between several types of lenders. Compare them the same way you would a credit card. Look at things like interest rates, repayment plans, terms and conditions and the small print. Keep in mind that even if you get a loan from a credit card company they are not obligated to follow the new credit card rules from the Federal Reserve. This is reserved only for a credit card loan.
In most cases, even though you consider the company you are getting a loan from a credit card company, they don’t consider themselves as such. Instead, they are a lending institution. As such, in most cases, you will find that their loan agreements are very similar to what you would find at your local bank.
Is it better to get a loan or a credit card?
If you are looking for a small personal loan, you might be thinking that a credit card is the solution to your problem. In some cases, this could very well be true. However, it is important to compare the terms for both options before you decide.
If you plan to take out a personal loan that you will pay off in just a few months and find a credit card with zero percent interest six-month introductory offer that offers the amount of money that you need, then the credit card could be a much better option. If, however, you find a credit card with a 20% interest rate and you can get a loan with a 7% interest rate then getting the loan is the better deal.
As with choosing between loans, choosing between a personal loan and a credit card requires you to do a little legwork, even if you intend to pay off your debt in a short period. There is no getting around the fact that a lower interest rate is going to save you money.
A quick way to compare loan types is to go to CNN Money, where they provide a list of current interest rates for loans, credit cards, mortgage rates and more.
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