Gold Loan Vs Personal Loan: Understand the Advantages & Disadvantage

Gold Loan Vs Personal Loan: Understand the Advantages and Disadvantages of Both

Gold Loan Vs Personal Loan

Are you going to take a loan in any bank then would know that the process of taking a loan has become very easy? Nowadays, there are many kinds of options available in the market where you can fulfill your money problem by taking loans. In this case, you can compare personal loans and gold loans in different options and see which option is better.

Here, we will discuss all the information about the Gold Loan Vs Personal Loan.

Gold Loan

If you want to take a gold loan, instead of applying for a personal loan, you may also consider using the gold kept in your house which is available as a Gold Loan. The processing time for taking a gold loan is much quicker.

#1. Less dependent on Credit score:

Nationalized banks, private banks, and other financial institutions check your credit score while lending and decide the amount and interest rate on your loan based on credit score. Gold loan is less dependent on credit score. In such, those people whose credit score is poor can easily take loans with the help of gold.

#2. Cheap Interest Rates:

The gold loan comes in the category of secured loans. In this case, the gold loan interest rates are lower compared to other unsecured loans.

#3. Price of Gold:

Gold price fluctuations can make a difference on LTV (Loan-to-Value Ratio). Gold loan is given to us by nationalized banks, private banks, and other financial institutions on the basis of the current gold market value.

#4. Accuracy:

Nowadays, only pure gold (18 carats and more) is pledged by most lenders. Many jewelers do not even take plated jewelry and oxidized jewelry.

Personal Loan

A personal loan comes in the category of unsecured loans. Hence, credit history is required in personal loans. Many people are out of banking services. In this case, there is no credit history of these people. They can’t even get a personal loan if they want. But, they can get a gold loan.

#1. Have a Good Credit Score:

Credit score plays a very important role to approve your loan application in Financial Institutions. If you want to take a personal loan, you should first check your credit score. Hence, we should always keep a good Credit score.

#2. Easy Process:

You get a loan within 48 hours of applying for a personal loan. At least the documents are sought in this loan. There is no demand for any asset to be pledged in the personal loan.

#3. Period:

Personal loan duration is lower than other loans. In this loan, you have to make a fixed payment. It ensures that your loan will be repaid soon compared to the gold loan.