Gold Loan and Personal Loan are two convenient financing options when you need money at a short notice. Read both their advantages and disadvantages in detail before you make your decision.
The loan approval and disbursal process are swift and easy.
Credit history is not needed, since it is a secured loan.
There are flexible repayment options.
Lenders usually offer 75% of the gold value as a loan and the 25% high margin is kept with them. A Gold loan calculator will help you determine the EMI for you.
In case you fail to repay the loan, the lender can liquidate your asset to recover the money.
Personal Loan
This is a loan without a security deposit, so you do not have to pledge any collateral to apply for a personal loan.
With a Flexi Personal Loan, you can borrow when you want from a sanctioned loan amount and pre-pay when you can.
You need to fulfill simple personal loan eligibility criteria.
Minimum documentation is required and once the document verification is done, the amount is disbursed to your account within 24 hours.
Make sure you have a good credit history above 700.
Gold loan
No Credit History Required: With gold loans, you do not have to worry about their credit score as banks do not consider your credit history. Generally, you are not required to furnish your existing loans or debt obligations before availing a gold loan.
Higher Loan Amount: Gold loan usually provide a higher maximum cap on the loan amount than Personal Loan. Most banks & financial institutions offer personal loans for up to Rs.40 lakh, whereas lending institutions provide gold loans for a maximum of Rs.5 crore. In case you have a higher loan amount requirement, you can prefer gold loans. Utkarsh Small Finance Bank Gold Loan provides you with a higher loan amount.
Low-Interest Rates: Generally, gold loans come with lower interest obligation that personal loan, which means the cost of the gold loan is less than other loan types. Also, you will be required to take less money out of your pocket to repay the loan.
Personal Loan
No Collateral: It is considered as the greatest advantage of a personal loan, borrowers are not required to keep any asset as collateral while availing a personal loan.
Quick Disbursement: Most banks & financial institutions credit the loan amount into the borrower’s account within 48 hours after the loan has been approved.
Minimal Paperwork: Personal loans do not involve elaborate paperwork. You will only be required to provide basic KYC information documents and proof of income as required by the bank.
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