Gold Loan vs. Personal Loan Which One Should You Choose

When in need of funds in an instant manner, two of the most trending and popular options are a gold loan and a personal loan. Opting for one out of these two depends on tons of factors for obvious reasons. 

Requirement urgency, amount of money required, repayment capability, and nature of the collateral are some of the common and obvious factors. Today, in this article, let’s understand and offer an in-depth comparison of gold loans and personal loans to help you make a wise decision when it comes to your finances. 

What is a personal loan and a gold loan?

Personal loan

A personal loan is an unsecured loan offered by financial institutions based on the borrower’s creditworthiness, repayment ability, and income. Here, the potential borrower does not need to pledge any valuable asset to secure the loan amount. 

Gold Loan

As the term suggests, it is a secured loan when the borrower pledges their valuable gold ornaments in order to get funds in exchange. The amount of the loan is determined based on the value and, most importantly, the gold purity which plays a very crucial role. 

Both these loan types are known for their quick disbursal and minimal documentation requirements. 

Key Factors to Consider 

• Rate of interest

Gold loans commonly provide decrease interest rates because they are secured via the gold valuables you pledge. The lender’s danger is mitigated by the collateral, permitting them to pay a lower price. On the other hand, a personal loan comes with higher interest prices as they’re unsecured in nature. 

• Loan amount

The mortgage amount absolutely depends on the cost in addition to the purity of the gold price. When we talk about a personal loan, it depends on your income, credit score, and compensation capability. 

• Repayment tenure

Gold loans usually have shorter repayment periods, often ranging from a few months to a few years. Other types of loans offer longer repayment periods, which can easily range from one to five years or even more in some cases. 

• Processing time

Gold loans generally proceed quicker due to the fact the collateral (gold) reduces the lender’s threat, leading to approvals in a blink of an eye. Personal loans, alternatively, would possibly take longer to process due to the need for a radical evaluation and take a look at. 

Best platform for Gold loan and Personal loan

If you are looking for any of these financial instruments, simply download the Bajaj Finserv application. It is remarkably smooth and handy to use, and also do not want to waste your time. With only a single tap in your phone, you are more than desirable to head.

Around three and half months ago, I had planned to take out a personal loan, and one of my associates told me about this application. Believe me, this loan app is the best in every way! Highly recommended.

Conclusion

Decision between these financial instruments should be based on thoroughly evaluating these key factors. If you need funds instantly with a lower rate of interest and have gold to pledge, a gold loan might be much more suitable. However, if you don’t want to prefer not to risk any assets and require a higher loan amount, a personal loan could be the best choice. 

So, what are you waiting for? Download the best app now!