Gold Loan Vs Personal Loan: Which one is betterFinancial crisis when it strikes, taking a loan becomes a convenient option. It is a subjective choice to choose a specific type of loan to manage the monetary requirement. Generally, a personal loan or a gold loan comes as a common option that people depend on to organize immediate funds. So, which is a better option between the two loans – a personal loan or a gold loan?
A personal loan proves to be a better choice due to a number of reasons:
- Easy availability online through instant loan apps
- Paperless verification of documents
- Minimum eligibility criteria
- No collateral or security is required for loan
- EMIs can be calculated in advance
- Approval and disbursal in 24 hours only
Simply Cash is one of the latest instant personal loan appsin India that offers paperless and hassle-free way of getting quick funds. So, if you have any short-term loan requirement up to Rs.1,50,000, download the Simply Cash app to apply for an instant personal loan.
Gold loans can be considered next when a higher loan amount is required. In case, you are opting for a long-term loan, gold in the form of jewellery or gold bars can be submitted as a collateral against the loan amount. Besides, gold can be mortgaged to raise a sum of a similar gold value. Gold loans fall under the category of secured loans so credit history is not required as considered in personal loans.
It is advisable to keep your substantial gold asset safe and opt for personal loans that can be repaid easily in a maximum period of 5 years. So, by choosing personal loans, borrowers are not risking their hard-earned physical gold with the lenders. However, if you are sure of repaying gold loans in a period of 1year then it is safe to apply for gold loans.
Advantages of Personal Loan
- Instant Availability: Loans are approved in the shortest span of time, within 24 hours to 48 hours of a working day.
- Affordable Interest Rate: The interest rate on a loan may vary depending upon the type of loan, credit score, tenure and other financial factors. If the credit score is good the rate of interest will be low.
- Tax Benefits: Most of the tax deductions are on interest and not on the principal amount.
- Financial Stability: Personal loans are approved quickly on time. This provides financial stability and saves borrowers from sinking in financial risks and delays.
- Collateral Free: Personal loans do not require any security or a guarantor for approval. This keeps your assets safe.
- Affordable Interest Rate: Since gold loans are secured ones, the risk factor is less and so the financial companies tend to charge a lower rate of interest. In the case of defaulters, lenders can raise their money through the mortgaged gold.
- Easy Procedure: There are no steps involved. The disbursal is quick after submitting the gold and the necessary attestations.
- Minimal Documentation: Unlike personal loans, gold loans do not require a series of documents for approval. Income proof and financial documents are excluded when gold loans are preferred.
- Stability Insignificant: As long as borrowers are willingly submitting their gold against the loan amount, there is no requirement of verifying the borrower’s residential stability and job history.