Should I take out a loan or a credit card?

The cost of borrowing is considerably cheaper than a year or so ago, but deciding whether to apply for a loan or a credit card is an important decision. 

A credit card is a convenient way to borrow in the short term, but despite the reduced interest rates and 0% introductory offers, plastic isn't the cheapest way to borrow a reasonable sum of money unless you envisage being able to pay it all back before the credit card introductory offer expires.

Loans are generally charged at much lower rates than credit cards and in recent times the market has become far more competitive with a number of providers cutting their personal loan rates. 

A loan offers further benefits to the borrower. For example, the borrower applies online and if the application is accepted, the money remains in an account until it is actually drawn down by the borrower to use. Only when the loan is actually drawn down is interest charged. So people looking to make a substantial purchase can proceed, knowing that they have guaranteed funds available, but it won't cost them a penny until they actually spend the money.

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