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Bank vs NBFC, Online Gold Loan, Compare Gold Loan Interest Rates, GoldLoanBazaar.com

Bank vs NBFC .Which is the Best?

Bank Vs NBFC: Which is the Best?

Comparison between the 2 is done to rule out the one which offers Lowest Interest Rates and Maximum convenience to the Borrower for availing Gold Loan.

Bank:

Banks are financial institutions which are regulated and are licensed by Reserve Bank of India (RBI) to receive deposits and offer loans. They also offer services like issuing of cheques and demand drafts. provide financial services such as wealth management services and currency exchange. Banks include both public and private sector banks like State Bank of India, Punjab National bank, ICICI Bank, HDFC Bank etc.

NBFC:

NBFCs are financial institutions that are allowed to lend and make investments like that of banks but do not hold banking license and are not allowed to :

  • accept demand deposits
  • do not form part of the payment and settlement system and cannot issue cheques drawn on itself
  • deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

NBFC include Muthoot Finance, Mannapuram Gold Loan, Muthoot Fincorp, IIFL, Capital First etc. those offers Gold Loans.

Nowadays, many people find themselves in a dilemma whether to choose Bank or NBFC for taking a Gold Loan. There are certain factors and risks associated which must be considered by you while making a Decision.

We, at GoldLoanBazaar.com, have conducted detailed research and analysis on ” Bank vs NBFC ” which may help you to get out of the dilemma and make the right choice based on the factors stated below:

1) Interest Rates:

The rate of interest is one of the main aspects of all types of loans. NBFC usually charge a higher rate of Interest as the cost of funds for NBFC is higher and they are not authorized to accept funds in form of Demand Deposits. The Rate of Interest charged by Banks is much lower as Banks have got access to low-cost funds that they accept in form of deposits from the public. Also, there is a high risk of defaults in case of NBFC, so they charge higher interest rates to offset the unforeseen losses. You can save your hard earned money by Comparing Gold Loan Interest Rates and making the decision accordingly.

2) Loan-to-Value:

Loan to Value ratio, popularly called as LTV, is usually less in case of NBFC. As per RBI guidelines, NBFC is allowed to provide up to 75% of LTV of Gold pledged as collateral. This is mainly because of the high risk of default in case of NBFC. Whereas, banks offer higher Loan to Value (LTV ) which may be as high as 85 %.

3) Time Taken for Gold Loan Disbursement:

Gold Loan in 2 or 5 or 10 minutes is none other than a myth or a marketing Gimmick. It is most commonly adopted by the NBFC to lure customers for getting quicker and faster loans. In practicality, it’s impossible to evaluate the gold, its processing and loan disbursement in such a short span of time. You must not get flattered by such practices and offers.

But indeed, most banks and NBFC usually takes around 30 minutes to a few hours. It depends on the fulfillment of their eligibility criteria and the documents required to avail the loan. Needless to say, the Gold loan is the easiest and fastest way to get liquidity as compared to its most sought alternative i.e. personal loan.

4) Disbursement of Cash:

The banks do not pay in cash for the loan amount sanctioned by them. All the sanctioned loan amount is transferred to Borrowers bank account either by the way of Cheque or Account transfer or NEFT/RTGS as desired by the Borrower. But NBFC is allowed to disburse gold loans only up to Rs 20,000 in form of cash(as per RBI guidelines. Earlier it was Rs 1,00,000). For loans amounting above Rs 20,000, NBFC also goes cashless. They transfer loan amount either by the way of Cheque or NEFT/RTGS directly in Borrowers Bank account. This move is in line with the rules issued under the Income-tax Act.

5) Bank Vs NBFC Regulation:

All the banks are regulated by RBI whereas NBFC is a company registered and regulated under the Companies Act, 1956.

6) Gold to be Pledged:

As per RBI guidelines, Banks are only allowed to accept Gold Jewellery and Gold Coins (only up to 50 grams and of 99.99 % purity issued by Banks only in India ). Whereas NBFC is only entitled to offer Loans against Gold Jewellery only. NBFC is not allowed to offer Loans against Gold Coins.

7) Carat Requirement:

Minimum carat requirement in case of both banks and NBFC is 18 ct (75 % Gold Purity ) to 24 ct. Jewelry below 18 carats is not considered eligible for Gold Loan. Pledging spurious or fake Gold Ornaments for taking Loan is a punishable offense under IPC. This could end you up in Jail.

8) Gold Loans for Agriculture Purposes:

Banks provide special interest rates which are usually lower as compared to Normal Interest rates for Agriculture Gold Loans. Here, the borrower has to provide the proof of Landholding to get benefits. Concessional Loans are also offered to senior citizens and Women. Whereas, most of the NBFC does not offer any concessional or special interest rates for such Loans.

On the Basis of the above factors, one can easily differentiate between Bank vs NBFC and make the decision accordingly.

Apply for Online Gold Loan now.

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Gold Loan vs Personal Loan, Online Gold Loan, Compare Gold Loan Interest Rates, GoldLoanBazaar.com

Gold Loan vs Personal 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 You can get a Gold loan if you have Gold Jewellery (above 18 ct.), 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 The 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 The 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 You have to collateral Gold Ornaments in order to avail a Gold Loan. Unlike You need not provide any collateral security 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 a must for an individual in order to avail a Personal Loan. Unlike
7 Income Proof or ITR You need not provide any income proof or ITR is in order to avail a Gold Loan. Like You have to present Income Proof/ ITR 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. You can further extend it 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 are 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 A 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 You can close a Gold Loan any time by paying very less or NIL prepayment charges. It depends 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?

  • 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.
  • You will get Concessional Interest rate by the Banks if 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.
  • You will get full compensation for the gold in case of any  Thefts, fire etc.

You can Apply for Online Gold Loan now.

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