Personal loans and gold loans fall under different categories but aim to cater to the same need, finance. Both have various features and somewhere it might feel that they are surpassing each other but in the end, they are aimed at solving the financial needs of a being. However, HDFC personal loan has favorable features that attract borrowers towards their scheme. As we move along we will get to see the differences between both the secured and unsecured loans.
A few parameters are mentioned down below on the basis of which you can compare both personal loan and gold loan:
Processing time- Gold loans have a faster processing time as they fall under the category of secured loans. After approval of the loan, the credit is to e transferred within an hour or a maximum of 24 hours. However, unsecured personal loans have a longer processing time. They take up to 3 to 7 days to credit the cash even after the approval of the loan. This is so because the borrowers have to go through more paperwork and documentation for a security basis as a personal loan does not come along with collateral security. Thus, if you are looking for a faster transaction of credit then you should go for a gold loan.
Loan amount- Personal loan allows a loan amount that ranges somewhere between INR 50,000 and INR 25 lacs. However, some lenders go to the extent of proving up to 75 lacs if they find a creditworthy borrower. On the other hand, the gold loan amount is based on the collateral value provided by the borrower. RBI has increased the loan amount up to 90% of the collateral value. Thus if you have gold assets that can provide you with the required credit then a gold loan could be a suitable option for you. Otherwise, personal loans are always suitable for crediting ransom loans.
Interest rate- Personal loan interest rates are higher compared to that of a gold loan, as personal loans do not come with security criteria. A gold loan falls under the category of secured loan and so it offers an interest rate that starts from 9.9%. On the other hand, personal loans have a rate of interest ranging between 10.45% to 26%. Thus if your priority is to pay less interest then you must opt for a gold loan.
To get a better look at the differences one can survey the market to check the loan rates and criteria in a more detailed way. Lastly, the choice always lies in the hands of the borrowers, so before applying for a loan always compare the interest rates, loan amount, and processing time. This will allow you to understand the loan processes and get a loan more compatible with your needs.
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