How does a personal loan compared to a credit card cash advance?

Personal loans and credit card cash advances serve different purposes and have different characteristics.

A personal loan is typically used for planned or larger expenses such as home renovations, weddings, or debt consolidation. When you take a personal loan, you receive a lump sum amount that is repaid over a fixed tenure through EMIs. This structure makes budgeting easier, as you know exactly how much you need to pay each month. Personal loans are generally unsecured which means that you do not need to provide collateral, and they usually offer lower interest rates as compared to credit card cash advances. As of 2025, personal loan interest rates often start from around 10–12%*, depending on your credit profile, and the repayment terms can range from one to five years. Processing times may take a day or more, but some lenders offer quick disbursal for eligible applicants.

A credit card cash advance lets you to withdraw cash instantly from your credit card’s available limit, either at an ATM or a bank branch. This option is best suited for emergencies where immediate funds are required. However, cash advances come with much higher interest rates—often above 24%*—and the interest starts accruing immediately from the day of withdrawal. Most credit cards usually charge a cash advance fee, typically 3–5% of the withdrawn amount. There is no interest-free period for cash advances, and repayment flexibility is limited, as the amount is added to your next billing cycle and must be paid off quickly to avoid mounting interest and fees.