Difference between gold loan and personal loan

Posted by Saahil khan on December 1st, 2020

Many people face financial crises in their life. The dearth of cash can put you in trauma when you are not able to fulfil your basic amenities. Everyone wants money for the smooth functioning of their lives. Also, many businesses require money to invest in plant and machinery, to purchase raw materials, to expand their business etc. To fulfil all these requirements people prefer to take loans from their preferred place. There are varieties of options available for the loan like personal loan, home equity loan, gold loan, small business loan, student loan etc.

Among all these, personal loan and the gold loan is the preferred choice of many people. They have their features and advantages. These both loans are easy to apply to incur fewer formalities. There are many instant gold loan company in Delhi and other parts of the country and the same is with the personal loan. Also, in this tech-savvy generation, you can enjoy the benefits of gold loan and personal loan online. You can contact the service providers and they will assist and guide you at your place conveniently. Most people are confused to choose one among both. So to make a fair decision, the following points will help you to understand the difference between a gold loan and personal loan:

• Processing time- In case of personal loan, it takes usually 2-7 days to complete its documentation and formalities which includes payslips or income tax return forms etc. With a gold loan, there is no processing time. You just need gold to pledge and you will get the amount accordingly.
• Loan amount- The personal loan amount may range between Rs.50,000-Rs.40 lakhs. The amount may differ from a person to person depending upon the loan tenure and repayment capacity of the individual. In gold loan, the amount depends upon the gold given as security. Higher the amount of gold, higher the amount you can avail. Plus it also depends upon the current price of the gold and its quality (must be more than 18 carat) and quantity.
• Interest rate- Interest rate of personal loan may vary from 8.45%-26% per annum. In gold loan, the rate of interest may vary from 7.25%-29%.
• Duration- The personal loan spans 1 year-5 year but some lenders offer till 7 years. For gold loan, its tenure ranges between 7 days–3 years. A personal loan will be better for those seeking for a bigger loan getting more period to repay whereas a gold loan is better for those who want a short term loan as it is cost-effective.
• Repayment- The repayment options for both the loans are the same. You have to pay EMI every month. Once clear with the instalments, the owner will get its gold back.

So it’s very easy to get a personal loan from any bank if you have good credit and handsome salary depending upon the amount of loan. On the same hand, you can get a gold loan against gold jewellery in Delhi and from other parts as well from any bank or any other source.