Gold Loan vs Business Loan
|Sr.||Features||Gold Loan||Personal Loan|
|1||Interest Rate||Gold Loans are offered by Banks/NBFC’s at very Lower and Competitive Interest Rates ranging from 10 % to 14 % depending upon the purpose, duration and amount of Loan||Like||Interest Rates on Business Loans are much higher. Most Banks and NBFC offers business loans at interest rates ranging from 16 % to 24 % and even above.||Unlike|
|Simple and Easy Documentation. You just need to provide your address (Aadhar Card/Driving License/Voter Card/Passport etc) and Identity proof(Pan Card, Aadhar Card, Passport etc) for KYC.||Like||Lengthy and Complex Documentation. Along with your Address Proof and Identity proof, you have to submit Bank statements of previous 6 months, Latest ITR with Computation of Income, Balance sheets, Profit & Loss Account statements certified and Audited by CA, Trade Licenses, Business Existence proof and other related documents.||Unlike|
|Less Time Consuming Process. Usually, it takes around 30 minutes to an hour to process, sanction and disburse the Loan.||Like||Very Time Consuming Process as it involves a lot of Documentation. Usually, it takes around 7-15 days and sometimes even more to process sanction and loan disbursement.||Unlike|
Income Proof or ITR
|You need not present any sort of ITR or Income proof documents in order to avail a Gold Loan.||Like||Income Proof is a must and foremost required in order to proceed with a Business Loan. You must have at least previous 3 years ITR in order to be eligible for a Business Loan.||Unlike|
|You need not have to present any guarantor in order to avail a Gold Loan.||Like||It solely depends upon the Lender, Loan amount, Credit History and Risk profile of the Borrower whether you are required to present a guarantor or not.||Unlike|
|Very Little or no processing fees is levied by Banks/NBFCs to avail a Gold Loan. Usually, it ranges from NIL to 1 %.||Like||High processing charges are levied on the Business loan. Usually, it ranges from 1 % to 3 % depending on the Lender.||Unlike|
|Very less or Nil pre-closure charges are levied by Banks/NBFC for Loan Closure.||Like||Very high pre-closure charges are involved in Business Loan. Generally, it ranges from 2 % to 5% plus taxes on the outstanding loan amount. It varies from different Lenders or Financial Institutions.||Unlike|
|Gold Jewellery is pledged as a security to the Bank/NBFC in order to avail a Gold loan.||Neutral||There may or may not be any need to pledge a security in order to avail a business loan. It depends upon the Nature of Business, Loan Amount, Credit Worthiness and Risk Profile of the borrower.||Neutral|
Purpose of Use
|There is no need to specify details of the purpose of availing a Gold Loan. You can avail a Gold Loan for Home Construction, Higher Education of kids, Medical emergency or any other sort of needs.||Like||You must have to specify the purpose of availing a Business Loan i.e. for Business Expansion, purchasing new plant/machinery etc and that amount must be used for the same purposes.||Unlike|
Gold Loan vs Business Loan – GoldLoanBazaar.com
List of documents that are required along with your Gold Loan application:
- 2 passport size photographs
- One Identity and One Address proof such as Driving License, Pan Card or Form 60/61, Passport, Voter ID Card, Aadhar card by UIDAI, Ration card
- The borrower must have Proof of land holding for Agriculture loan of more than Rs 1 lakh.
Eligibility Criteria to apply for a Gold Loan:
- You must have a valid Address and ID Proof.
- You must be a citizen of India.
- The purity of gold jewelry to be pledged must be above 18 ct.
List of documents that are required along with your Business Loan application:
- PAN Card – For Company/Firm/Individual
- A copy of any of the following documents as identity proof:
- Aadhar Card
- Voter’s ID Card
- PAN Card
- Driving License
- A copy of any of the following documents as address proof:
- Aadhar Card
- Voter’s ID Card
- Driving License
- Bank statement of the previous 6 months
- Latest ITR along with computation of income, Balance Sheet, and Profit & Loss account for the previous 2 years, after being CA Certified/Audited
- Proof of continuation (ITR/Trade license/Establishment/Sales Tax Certificate)
- Other Mandatory Documents [Sole Prop. Declaration Or Certified Copy of Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (Original)]
Eligibility Criteria to apply for a Business Loan:
- Self-employed individuals, Proprietors, Private Ltd. Co. and Partnership Firms involved in the business of Manufacturing, Trading or Services.
- The business should have a minimum turnover of Rs. 40 lakhs
- Individuals who have been in the current business for a minimum of 3 years, with 5 years total business experience.
- Those whose business has been profit making for the previous 2 years
- The business should have a Minimal Annual Income (ITR) of Rs. 1.5 lakhs per annum
- The applicant should be at least 21 years at the time of applying for the loan and should be no older than 65 years at the time of loan maturity.
On the basis of above comparison, you can easily determine which one is best i.e. Gold Loan vs Business Loan and choose the best that suits your needs.