Microcredit has been a hugely popular solution that is easily usable and can be used to manage the occasional expenditures better. A small loan is provided to individuals with fewer earnings and motivates them to become self-employed. Microfinance has influenced the widespread use of services like BNPL(Buy Now Pay Later), credit cards and even personal loans.

Present-day consumers, especially the younger generation, are looking for microcredit solutions because of the flexibility and fluidity of the repayment process. These services have been a part of the era that believes in quickly borrowing money with just one tap or click. There are multiple

options present in the digital ecosystem for a personal loan, and one of the most suggested ones is those that grant easy or instant loans. With the growth of e-commerce, the popularity of microcredit solutions has increased at a tremendous speed.

Therefore, through this article, we will try to understand which microcredit solutions among these three services – BNPL, Credit Cards, Loans or personal loans can be better by digging deeper into the ideas of these financing options.

BNPL or Personal loan

BNPL(Buy Now Pay Later) and Personal loans are different products and provide varied services. Both the services offer instant loans to the consumers. In BNPL, the loan is provided depending upon the credit score and repayment history; borrowers can avail of loans upto 1 lakh. At the same time, a personal loan allows borrowers to borrow for upto INR 25 lakhs.

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Lenders of unsecured loans have extensive work on the borrower’s creditworthiness before any loan disbursal, and the amount is credited to the borrower’s account directly. But when the online personal loan is sanctioned, the borrower can get the amount debited directly to their account.

BNPL can be availed for lesser expenditure, and a personal loan can be borrowed for colossal spending as the latter provides no EMI without interest. In contrast, a personal loan offers EMI up to 11% and above.

BNPL recommends more restricted usage of the loan amount, but personal loans provide “no limit usage”.


Both Credit Card and BNPL being popular instant micro-loan financing solutions have their distinct way of providing loans with a similarity of flexibility.

Credit cards provide benefits to borrowers by allowing them to make a purchase that they may not be able to afford. Whereas Book now pays later, services enable the customers to repay purchases in monthly instalments, making it more affordable.

Credit cards are known to ask for higher interest rates compared to BNPL services. But there are opportunities to join many rewards programs if the borrower decides to get a loan via credit card, which is not possible with BNPL services.

BNPL doesn’t have any credit check and application process, unlike credit cards, as they extensively provide significance to credit checks and the application process.

Therefore, when it comes to credit cards, they can provide more perks like higher credit limits. In contrast, BNPL services are smaller and simpler credit facilities for consumers to purchase. Therefore, it depends upon the borrower and their expenses.

Credit cards or personal loans

Personal loans and credit cards are meant to avail instant money, and both the services provide loans. Both have the same features and the same attributes, along with some important distinctions as well.

Unsecured loans are issued and supported based on the borrower’s creditworthiness without any collateral. Whereas in terms of borrowing loans from credit cards, the fund administered by a financial company provides the holder with an option to borrow funds. The borrowing limits are supplied according to the individual’s credit rating.

Personal loans provide lower interest rates than credit cards, and they are cheaper in the long run. But to borrow a loan from a credit card, the individuals must have a good cash flow.

When borrowers need immediate cash or funding, they can opt for credit card loans as the balance gets transferred without any interest.


BNPL has become a famous and commonly used finance purchasing solution, along with personal loans and credit cards. But, one has to choose between them depending upon their needs, intended expenses, and eligibility.

Availing personal loans is more favourable for multi-fold and significantly huge expenses like weddings, renovations etc. On the other hand, BNPL and credit cards are minor costs. But if compared between BNPL and credit cards, a credit card loan is more beneficial as it has better benefits and is easy for digital transactions.

Individuals can borrow both BNPL and personal loans with lesser documentation, but if compared to an unsecured loan, BNPL is easier to sign in. Therefore, sometimes BNPL can be profitable compared to personal loans.

BNPL are for users who are not suitable for credit cards or consumer loans because of strict eligibility criteria.


If one urgently needs a small amount of cash that they want to repay quickly within a month, then BNPL must be a good choice. On the other hand, if one wants to borrow money for huge expenses and intends to repay it on time, they should go for a personal loan. An individual can avail of an unsecured loan with zero documentation if that’s what the borrower prefers to do. Modern consumers are looking for microcredit due to the availability of instant money.  However, it is very significant for the consumers to understand the fundamental difference to make a wise choice.


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