If you need money urgently, a gold loan is an attractive option. It offers up to 70-75% loan amount against gold pledge, and the interest rate can range from 8.40% to 26.82%, depending on the bank or financial institution. Gold loans have lower interest rates and easier process than personal loans.
The price of gold is constantly increasing, so if you suddenly need money, you can take a gold loan. Gold loan is easily available and is cheaper than personal loan. According to reports, the gold loan available from banks and NBFCs is increasing by 8.45% on an annual basis.
Both gold loan and personal loan are available to you in a very short time. This can prove to be helpful for you in case of emergency or when you are short of money. Therefore, those who have more gold can decide which of these two loans to take. Let’s know about Choosing Between Gold Loan And Personal Loan.
Benefits Of Gold Loan
- This is a secured loan, in which you do not even need a credit score.
- Taking a loan by pledging gold reduces financial risk.
- The processing time in a gold loan is very less and you get this loan very easily.
- You do not need many documents in a gold loan, you can take a loan only with the help of Aadhar card, PAN card.
Benefits Of Personal Loan
- Personal loans do not require any asset to be pledged, making it easily available.
- Personal loan applications and approval processes are fast, making funds available immediately in times of need.
- Personal loans usually come with fixed interest rates, making it easy to plan your monthly payments.
- Making regular and timely personal loan payments can improve your credit score.
Difference between Gold Loan and Personal Loan
Gold Loan
- Gold loan is very easy to get.
- You do not need a credit score for a gold loan.
- The interest rate of a gold loan is lower than that of a personal loan.
Personal Loan
- You have to fulfill some conditions in a personal loan, so not everyone can take this loan easily.
- Whereas, to get a personal loan, it is important that your credit score is good.
- Whereas, to get a personal loan, it is important that your credit score is good.
Long Term Personal Loan And Short Term Gold Loan
However, both gold loan and personal loan depend on your needs and profile. Overall, personal loan is suitable for those who want a long term loan. Gold loan is suitable for those who want less money and less time and whose repayment capacity is good. Personal loan is suitable for those who have a good credit profile.
Processing fees In Gold Loan And Personal Loan
The processing fee for a personal loan is usually 3 percent of the total loan amount. Some banks or NBFCs charge a processing fee of 0.10 to 2 percent on gold loans. Therefore, you should look at the option of both before taking a personal loan or a gold loan. If your processing fee is high, then it can be a bit expensive for you.
Conclusion
If you are also interested in taking a loan, then you should take a gold loan instead of a personal loan. In this, banks provide you a loan at a lower rate of interest. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
