here is a reason why gold continues to rule the roost when it comes to savings and investment. Gold transactions are one of the easiest. If you have gold ornaments at home and are in dire need of cash, you can easily lease them and get the money. The paperwork and related hassle are little to zero and you can get the cash almost immediately. No wonder, gold loans are one of the strongest contenders to personal loans. But that doesn’t mean one is better than the other. It all depends on the situation and market trends at the time. For instance, if you are salaried and have a good CIBIL Score, personal loans could work out cheaper for you.
Here is a comparative chart to do away with your dilemma.
|Specifics||Personal Loans||Gold Loans|
|2||Interest Rates||Starts from 10.99% in traditional banks and 11.99% in alternative lenders and can go up to 24%.||Starts from 12% and can go up to 24%|
|3||Loan Amount||The starting amount is usually Rs. 50,000. It depends on the applicant’s creditworthiness and some banks are known to give up to Rs. 30 lacs. Alternative lenders, on the other hand, offer up to Rs. 7.5 lacs. Lenders take a risk-based approach in loan approval.||Gold loan amount can vary from Rs. 1000 to Rs. 1 Cr. They usually give 75% of the current market price of the gold given.|
|4||Loan Tenure||Traditional banks allow loan tenures ranging from one to five years while alternative lenders and Fintech startups keep loan terms one to three years.|
|5||Processing Time||Takes one to five working days depending on the lender.||Quicker than personal loans|
|6||Credit Score||Is a major determinant||Is important only when the loan amount is high and to be paid in EMIs.|
|7||Convenience||Can be applied online||Has to visit the lender|