Within a country like India, Gold has always been considered as a sentiment. It is levelled up to being called, ‘a valuable asset’ that people behold. The value that associates people with this ‘golden metal’ is irreplaceable—pledging Gold articles as collateral is looked down upon by various people. This is why most people avoid liquidating their Gold assets and prefer living in the state of helplessness and lack of cash.
But eventually, as technology began to advance and the concept of ‘formalization’ in the banking sector came into play, banks and NBFCs have been emphasizing upon newer forms of credit instruments. Indians have realized that gold loan can be their go-to in times of need. This sudden realization that has crept into people has led to the popularity of gold loans.
Many times, people prefer Gold Loans over Personal Loans. These types are approved to the borrowers who wish to meet their needs—for instance, marriages or unexpected emergencies. To cater to such situations, a gold loan is opted for. After pledging your Gold articles as collateral, you will receive the money on behalf of it. It works like the ‘barter system’ of give and take.
Whereas, in the case of Personal Loans, there is no collateral required. Various documents are verified, and a processing fee is levied upon. The fee ranges from 0.5% – 1% of the amount. But, when you prefer a gold loan, you do not have to submit your income proof. This excludes you from paying a processing fee. In turn, it reduces the financial burden.
The timeline involved for Personal Loans includes the banking entity being vigilant in offering you the loan and then sanctioning it. This can be tedious and time-consuming. For a gold loan, the procedure is lenient. You just need to sign a few documents, pledge the articles and receive the amount. The loan amount pertaining to Personal Loans can be up to INR 40 Lakhs. On the other hand, for Gold Loans, you can leverage a maximum cap. The amount is usually up to INR 5 Crore.
The limitation for Personal Loans is the presentation of your credit report. You need to showcase good credit scores. Since you do not have the concept of collateral in Personal Loans, your credit report is assessed. For a gold loan, the room for credit reports is not required. The lenders do not perform the formality of unnecessarily running across your credit statements and making it time-consuming. Even if you are a defaulter, you can apply for gold loan.
Now, Gold Loans come in with lower interests. They range between 11% – 13%. On the contrary, Personal Loans range between 16% – 22%. This means that the cost referring to the Gold Loan is lesser than that of the Personal Loan. You can also avail for flexible repayments, in the case of Gold Loans.
Having drawn a comparison of Gold Loans over Personal Loans, the choice to make is yours. If you need to reduce the financial burden off your shoulders, choose Gold Loans as of the ideal source of the application. You have room for innumerable win-win situations and do not have to wait for the loan to get approved. Just hop into the nearest branch and Apply for gold loan.
This post was created with our nice and easy submission form. Create your post!