No fine for paying off your debt early
A credit card has a collateral backing the loan i.e. you must offer the credit card company a property or any other asset as a security, which they can confiscate in case you are unable to pay your debt.
In a personal loan, however, there is generally no collateral backing at all. In this case, interest is charged only after you finally enter into the loan agreement.
The personal loan differs in another context that it is amortized i.e. in personal loan, the payment you do per month first pays off your interest charged for the period of time, and then only it pays the principal amount. Thus, it reduces the extra burden that otherwise would have been created due to the interest adding to the principal.
Also, you won’t have to give a fine for paying off the principal loan any earlier. However, this is also true for credit card services.
Shop online for getting lower interest rates
Nowadays there are many online lenders available which have made getting personal loans more convenient.
You just have to tell them the amount of money that is to be borrowed, the period for which you are borrowing and the purpose for which you want to raise the money. They won’t feel any need for checking your credit score and will directly offer you a particular interest rate. Also, this type of lending, also called peer to peer lending (P2P), provides you a loan at much lower rate than the banks as there is no need for any middlemen.