Gold Loan vs. Personal Loan - Which is Better & Why?

When it comes to the decision to opt between a gold loan or a personal loan, it really depends on your needs, as well as your borrowing profile. 

Here Are a few basic differences between the two

Secure Vs Unsecured: A Gold loan is a secured loan, which means that a gold loan needs gold to be pledged as collateral. Whereas a Personal loan is an unsecured loan, and thus no collateral is required.

Loan Amount: Personal loans range between ₹ 50,000- ₹ 25 Lakh. In contrast, the gold loan amount depends on the value of your gold asset, which you are pledging as collateral.

Lenders offer you a loan of up 75% to 90% of the value of your gold. This means the remaining 10%-25% of the value cannot be monetised.

Good Credit Score: In order to get the best offers, you will need an excellent Credit score to get a personal loan On the other hand, with a gold loan, you can earn some concessions as you are placing your valuable jewelry as a collateral. However, for people with excellent credit scores, the difference isn’t much.  

Loan Tenure: most gold loans don’t allow a tenure beyond 3 years, but a Personal loan comes with flexible repayment tenure facility up to 60 months.

Loan Processing Time: Gold loan processing may take a few days. When it comes to personal loans, lenders offer instant personal loan online up to ₹ 25 Lakhs, * with affordable interest rates. You can get the funds in your bank account within 24 hours* of loan approval.

Now that you are aware of the comparative features of the two, you can go ahead and make an informed decision based on your financial needs.