Conventional Personal Loan vs Loan Against Gold


#1

Is taking loan against gold a better option than conventional personal loan? How do they both differ from each other?


#2

Yes, it is better to opt for a gold loan over the personal loan. Following are the supportive reasons:

  • Interest rate charged under a gold loan is cheaper than the personal loan. At present the interest rate under gold loan is around 12-14% whereas it is 14-18% in personal loan.
  • Gold loan is processed much quicker than the personal loan.
  • The gold loan can also be used as an overdraft facility which can be used in emergency situation if not used regularly.
  • The personal loan can be denied if your income is not appropriate however gold loan can be easily availed.
    Following are the differences between gold loan and the conventional personal loan:
  • The gold loan is allowed 60% to 80% of the gold value and it is a secured loan whereas personal loan is unsecured. The interest in personal loan is relatively higher due to being an unsecured instrument.
  • The repayment tenure in gold loan is around 1 year which is comparatively shorter than the personal loan.
  • The processing fee and prepayment charges are higher in case of personal loan (2-3% of disbursed amount)

#5

I have read gold loan repayment schemes are flexible but I didn’t understand how. Any comments?


#6

Yes you have heard it right, gold loans offer various flexible schemes. For example you can choose to pay only the interest component during your loan tenure and pay the borrowed amount at the end of the tenure making the loan far more useful and pocket friendly.


#7

Hi,

A gold loan can be easily availed with minimal documentation. The loan is also disbursed very quickly, which can help you tremendously if you need it urgently. This is one of the most feasible options of getting a loan, especially when compared to a Personal Loan or a Credit Card loan.

However, the amount that is sanctioned for a gold loan might differ from one institution to another based on their policies and margin requirements. Pledging gold with the bank can give you a loan amount of up to 75% of the total gold value. Pledging gold with NBFCs can give you a loan amount as high as 85% of the gold’s value, depending on the purity of the loan. But, it is not only the value of gold that will be taken into consideration for your loan application to get approved. Your income and repayment capacity is also taken into consideration. You also need to pay interest on the loan amount.

On the other hand, getting a Personal Loan today is quite simple. If you are an existing customer with a bank, you can avail a pre-approved loan within a few minutes without having to submit any documents. You just need to login to your net banking account and apply for the loan by agreeing to the applicable terms and conditions. On completion of the application process, the loan amount gets credited instantly to your bank account.

In order to avail paperless Personal Loans through a loan aggregator like BankBazaar, you need to apply for the loan and submit scanned copies of the required documents online, following which the bank verifies the documents and sanctions the loan. This process is carried out quickly without any human intervention.
The benefits associated with paperless loans include:

Reduced turn-around time: As the entire process is carried out online, there is no need to visit the bank or submit documents manually, which usually takes a lot of time. With no human intervention, the loan gets sanctioned in the shortest possible time. In case of pre-approved loans, the bank is well-versed with the customer’s profile and the loan is pre-approved. Disbursement is then carried out in a few minutes.
Fewer hassles: The paperless loan approval process is hassle-free since there is no need for hefty paperwork or running around to get the loan sanctioned. You can sit at home and compare loans from different banks and get a loan sanctioned with a few clicks.

Documents are safe: With your loan documents stored online, there is no fear of losing or misplacing them.
Want to check out Personal Loan offers? Click here.

Cheers,
BB Expert


#8

Hi Sourav,

A gold loan can be easily availed with minimal documentation. The loan is also disbursed very quickly, which can help you tremendously if you need it urgently. This is one of the most feasible options of getting a loan, especially when compared to a Personal Loan or a Credit Card loan.
However, the amount that is sanctioned for a gold loan might differ from one institution to another based on their policies and margin requirements. Pledging gold with the bank can give you a loan amount of up to 75% of the total gold value. Pledging gold with NBFCs can give you a loan amount as high as 85% of the gold’s value, depending on the purity of the loan. But, it is not only the value of gold that will be taken into consideration for your loan application to get approved. Your income and repayment capacity is also taken into consideration. You also need to pay interest on the loan amount.

On the other hand, getting a Personal Loan today is quite simple. If you are an existing customer with a bank, you can avail a pre-approved loan within a few minutes without having to submit any documents. You just need to login to your net banking account and apply for the loan by agreeing to the applicable terms and conditions. On completion of the application process, the loan amount gets credited instantly to your bank account.

In order to avail paperless Personal Loans through a loan aggregator like BankBazaar, you need to apply for the loan and submit scanned copies of the required documents online, following which the bank verifies the documents and sanctions the loan. This process is carried out quickly without any human intervention.
The benefits associated with paperless loans include:

Reduced turn-around time: As the entire process is carried out online, there is no need to visit the bank or submit documents manually, which usually takes a lot of time. With no human intervention, the loan gets sanctioned in the shortest possible time. In case of pre-approved loans, the bank is well-versed with the customer’s profile and the loan is pre-approved. Disbursement is then carried out in a few minutes.

Fewer hassles: The paperless loan approval process is hassle-free since there is no need for hefty paperwork or running around to get the loan sanctioned. You can sit at home and compare loans from different banks and get a loan sanctioned with a few clicks.

Documents are safe: With your loan documents stored online, there is no fear of losing or misplacing them.

Looking for Personal Loan? Click here.

Cheers,
BB Expert