Personal Loan vs Overdraft vs Credit Card
Which one is the best option for you?
Personal loans, overdrafts, and credit cards might seem similar on the surface, but each have certain features and benefits that make them a better choice depending on your individual circumstances.
How will you know which is the best option for you? We’ve outlined the main differences here.
Personal loan
A personal loan provides a lump sum of money, which is required to be repaid regularly over a set period of time. Interest is charged on the entire amount of the loan.
Overdraft
An overdraft is generally attached to an everyday transaction account, and acts like a revolving line of credit. It lets you access additional funds when your account balance reaches zero. You are approved for a certain limit and can draw as much as you need up to that limit. You are only charged interest if you use funds from your overdraft.
Credit Card
A credit card is also a revolving line of credit. Like an overdraft you are approved for a certain limit and can spend up to that limit in any given month. You are required to pay a minimum repayment every month. If you don’t pay the full outstanding balance in each month, you will accrue interest on the outstanding balance.
Product | Pros | Cons | Suitable for |
Personal Loan |
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Overdraft |
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Credit Card |
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Gateway offers flexible and competitive personal loans and overdraft facilities. Find out more by speaking to one of our Lending Consultants on 1300 302 474, 8am – 6pm AEDT, Monday – Friday.