Gold Loan vs Personal Loan debate is the thunder stealer when it comes to economic debates. The entire who came first, chicken or egg hits intellectual pause when it comes to the gold loan vs personal loan debate. The conversation might be very radical, socialist, or anti-tolerant, but the moment you talk about gold loan vs personal loan, everyone becomes ‘Amit Shah’ in an instance. Everyone knows everything about the clauses, rules, and criteria, etc. Someone could recall a friend’s experiences on either side of loans.
Now, as a matter of fact, we know that we can’t draw a mass conclusion. So. we’re going to present both sides before you. We leave it on you, which one do you pick (or don’t). If you’re reading this blog just for knowledge and aren’t really looking for loans, you’re in the right place. Let’s start with the old school distinction method, here we’ll be considering three parameters; Security, Time for Approval, and Documentation & Interests. Let’s begin, shall we?
Security
Gold loans are secured loans, whereas personal loans are unsecured loans. It is obvious that you’ve to pledge your gold against money for gold loans, but personally, there is nothing to pledge. The CIBIL score plays an important role when it comes to personal loans. If you have a score above 700 only then you are eligible to get a personal, CIBIL score plays no or less role in gold loans. CIBIL score can be increased when you repay your debts or installments on time and have a good financial relationship with your bank.
Time for Approval
Gold loans are approved earlier than personal loans. On the page, it takes 24 hours for a personal loan to be approved and disburse the money. In reality, it might take more too. Gold loan, on the other hand, can be approved quickly, in some banks it just takes an hour or so. In a personal loan, a representative from the bank checks the reality of your documents. At times, that isn’t necessary for gold loans, provided you have a receipt of the jewelry and required documents.
Documentation & Interests
In personal loan and gold loan, you have to produce address proofs and identity proofs along with KYC form. The bank gives you whatever amount you've asked for in a personal loan,(depends on the clauses of every bank) but in gold loan matters are a little different. According to the RBI, you got 75-90% of LTV against your gold. The remaining 25-10% is taken by the bank.
Note to remember; if you opt for a gold loan, the jewelry remains with the bank until and unless you pay the entire amount with gold loan interest rate. If you fail to repay it, then the bank shall liquefy your gold (and then your family might kill and then sell your organs to buy it back). In a personal loan, you don't lose anything except for credibility. Some representatives come to your house and ask you to repay it. You're in constant pressure by the bank. In this case, your family won't kill you but their restless stares will.
Both loans are a great option only if you need the money to multiply the money itself. The moment you take a loan, you are an asset to the bank but turn out to be a liability for yourself. The earlier the liabilities are gotten rid of the better it is. We're happy if we've given you any clarity amongst the two. If not, you can dig further into our site and find more information on the two.
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