Personal Loans vs Credit Cards: A Complete Comparison

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is a Personal Loan?
When to Choose a Personal Loan
What Is a Credit Card?
When to Choose a Credit Card
Pros & Cons of Credit Cards vs Personal Loans
Credit Card or Personal Loan: Weighing Which One to Choose
Alternative Funding Options
HELOC: A home equity line of credit, or HELOC, uses the equity in your home to secure a revolving personal loan, allowing you to draw funds as you need them. Just keep in mind you are putting your home up as collateral, which means you could risk losing it if you fail to repay the loan. 401(k) loan: You can also take loans from your 401(k) retirement plan, which is essentially making a loan to yourself from your own savings. However, there can be substantial penalties if you fail to pay it back on-time or leave your employer with an unpaid loan. You’ll also be missing out on potential growth on those funds. Loans from friends and family: Friends and family can offer you personal loans. And while they may offer excellent terms without having to make a formal application, these loans can risk your relationships if not paid back.
Explore Personal Loan Options With Lantern
About the Author
Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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