Gold Loan vs Personal LoanGold Loan
Gold Loan vs Personal Loan
|Sr.||Features||Gold Loan||Personal Loan|
|1||Interest Rate||Being Secured Loans, Gold Loans are offered by various Banks/NBFC at very Lower and competitive interest rates usually at 10 % to 14 %. Some NBFC charge even higher.||Like||Being Unsecured Loans, the interest rate charged is usually high ranging from 14 % to 24 % or even higher.||Unlike|
|2||Time Taken for Loan Sanction and Disbursement||It is a very less time-consuming process. Usually, it takes around 30 minutes to an hour to completely process and disburse the loan.||Like||It is a time-consuming process. It usually takes around 1 day to a few weeks depending on the availability of documents.||Unlike|
|3||Eligibility||In order to be eligible for availing a Gold loan, you have to provide your Gold Jewellery (which must be above 18 ct.) and your Address and ID proof.||Like||Eligibility for the Personal loan is decided on the basis of repayment capacity of the applicant. Salary Proof or Income proof depending upon the type of employment.||Unlike|
|4||Loan Amount||Loan amount is decided by the valuer on the basis of quality (above 18 ct.) and quantity (weight in gms.) of Gold ornaments to be pledged in order to avail a loan.||Like||Loan amount is decided by the lender on the basis of salary and income of the borrower i.e. its repayment capacity.||Unlike|
|5||Collateral||Gold is taken as Collateral by Banks/NBFC in order to provide a loan.||Unlike||There is no collateral security to be provided by the borrower in order to avail a personal loan.||Like|
|6||Credit History||No Credit History or CIBIL score is required by the borrower in order to avail a Gold loan||Like||Credit History or CIBIL Score is must for an individual in order to avail a Personal Loan.||Unlike|
|7||Income Proof or ITR||No income proof or ITR is required by a borrower in order to avail a Gold Loan.||Like||Income Proof/ ITR is must and to be presented in order to apply for a Personal loan.||Unlike|
|8||Documentation||Very less documentation is required in order to avail a gold loan. You just need to provide a simple address (Aadhar Card/Driving License/Voter Card/Passport etc) and Identity proof(Pan Card, Aadhar Card, Passport etc) for KYC.||Like||Along with Address proof and Identity proof, the borrower is required to present its Salary proof in case of salaried and Income tax return in case of self-employed business or professional and Bank A/C statement. Apart from this, Good Credit History or CIBIL score is must criterion in order to avail a personal loan.||Unlike|
|9||Loan Tenure||Gold Loans are usually Short Term Loans. Generally, you can avail a gold loan for up to 1 year which can be further extended to 3 years depending on your requirement.||Unlike||Personal Loans are usually for short term and medium term loan. You can choose the tenure as per your requirement. Generally, Loan tenure ranges from 1 year to 7 years.||Like|
|10||Processing Fees||Very Little processing fees or charges is levied by the Banks or NBFC for availing a Gold Loan. Generally, it is NIL to 1 %.||Like||Personal loan indulges high processing fees or charges as compared to a Gold Loan. Generally, it is 1 % to 3 %||Unlike|
|11||Repayment Options||Gold Loan provides Flexible Repayment Options. Here, you have the option to pay interest on Monthly, Quarterly, Half yearly or Yearly basis depending upon your Loan plan. You can choose any of the options as per your convenience.||Like||Personal loan doesn’t provide any flexible repayment options. You have to repay your loan in equal amount or EMI once chosen as per the tenure of the loan.||Unlike|
|12||Prepayment or Foreclosure Charges||Gold Loans can be closed at any time with very less or NIL prepayment charges depending upon Banks/NBFC. Generally, it is NIL to 1 %.||Like||You have to pay higher prepayment or foreclosure charges as compared to Gold Loan. Generally it is 1 % to 5 %.||Unlike|
Gold Loan vs Personal Loan:
Summary: As per the above comparison, 10 out of 12 features clearly states that Gold Loan is highly preferable and most Liked Loan option as compared to above Personal Loan. Therefore, a Wise Person must always compare different Loan options before making a Final Decision.
Gold Loan vs Personal Loan: Which one to Choose?
After analyzing features of both Gold Loan vs Personal Loan, it is clearly understood that:
- Gold Loans are way better in terms of ease of availability, lower interest rates, fast processing with minimal documentation.
- Even an unemployed person who isn’t eligible for a personal loan can avail a Gold Loan.
- Concessional Interest rates are offered by the Banks for Gold Loan taken for Agricultural purposes or availed by a woman.
- Most beneficial for meeting short-term expenses or unforeseen emergencies.
- Banks also offer overdraft facility against Gold to Businessman to meet the short-term working capital requirement of Businesses.
- Gold Pledged in Banks is fully insured of any Thefts, fire etc.
Click here to Apply for Online Gold Loan now.