Gold loans are more preferable because of some of the reasons. Any Indian citizen who is above the age of 21 years but below the age of 70 years can have the right to avail of a gold loan. Any Indian citizen who is a professional or a businessman or a farmer, the trader will be able to avail of the gold loan. There are many types of the bank which provide the gold loan at a very cheaper rate of interest.
For example, there are certain banks like Federal Bank that provide the gold loan interest rate of 8.50 % while on the other side of the coin Muthoot finance Group offers the gold loan at 11.99 %. In this way, there will be many different kinds of and loans are available in the market offering gold Loans at different rates of interest. There are advantages of gold loan due to which it is preferred all over the world. If a person wants to do a startup by doing business but not getting enough loan. In the type of gold loan, it is possible for anyone who is wanting to set up a business with his new idea and gold in the form of any ornament or the form of any coin with him in his house.
The different types of short-term loan payments in the case of the Gold Loan are one of the most vital advantages which an individual can get. Some types of loan repayments have been implemented for example bullet payment. Payments are those kinds of payments that are whenever a person is having a lump sum amount and wanting to reduce the burden of the loan a part of the payment can be made as a bullet payment. It reduces the burden of the loan as a new restructuring of the loan can happen with the reduced rate of loan as well as reduce the principal of the loan. While we check personal loan rate of interest is very much higher than that of the gold loan. The reason for having the gold loan is one of the most secured forms of loan and gold loan online can be applied as the collateral which is the gold itself placed against the bank and then dispersal of the loan amount is done.
A personal loan is an unsecured type of loan where there is no security or Collateral is engaged with the lender. In this way, the lender is at its full freedom to charge any rate of interest and does exploit the safeguard of the customers who can't tolerate so high a rate of interest. There are few disadvantages of the personal loan, most people don't like to take the risk unlike Gold Loan Interest Rate. If there is any kind of security and the payment is not done properly then the company can sell or auction the collateral used for taking a loan. In most cases, it has been seen that the worst thing about the personal loan is the highest rate as compared to any other type of loan.
Conclusion:
Due to this reason when there is an alternative of the particular service, people are shifting towards the other different types of loan arrangement at any cheapest rate that is a gold loan. As the gold itself is collateral and this is the reason for which the rate of interest in the gold loan is the lowest as it is secured while on the other side of the coin in the case of the personal loan the risk factor is too high due to which rate of interest is too high and the companies collect a good amount by the way of the high rate of interest in this way exploiting business continues.
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