Many people are in the lookout for the easy and efficient way of getting cash on a short span of time, for their own purpose, so they may come across to two different alternatives that are Gold Loan and Personal Loan. Both are similar when it is considered on the line of the interest rate as well as quick approval and disbursement, but still, there are some differences, that’s why one of this is considered more beneficial than the other.
Gold Loan And its Benefits:
India is known as the Golden Bird of the world as it was found in the land of India. Gold is considered as one of the most precious and the costliest metal in the country. Gold Loan is the financial aid which banks provide to the lender by keeping their gold as security with the bank. Gold Loan is considered one of the most secure types of loan because if a person fails to repay his loan than the bank has the right to use that gold.
Benefits of Gold Loan:
- As compared with some other forms of credit, Gold Loan requires less amount of documentation. It just requires two photographs, any ID proof, and residence proof.
- In the Gold Loan, no CIBIL score is required means any person can apply for this loan whether that person has a good CIBIL score or not.
- The Rate of Interest in this credit is less as compared to other credit.
- A person will get 75% of the gold value as the loan amount which is more as compared to personal loan.
- Gold Loan has flexible repayment formats. A person can repay them in three different formats:
- The borrower can pay the interest in the beginning, and can pay the principal amount at the end of the loan tenure.
- The borrower can repay the amount throughout the tenure on a monthly basis and can pay the whole principal amount at the end of the loan tenure.
- The borrower can pay both, the interest as well as the principal amount at the end of the tenure.
Personal Loan And its Benefits:
The money which is used for personal use as it can be used for marriage, medical emergency, trip etc. The Personal Loan is the unsecured finance which does not require any collateral. A person can get a loan on the basis of his monthly income, banking history etc.
Benefits of Personal Loan:
- The Personal Loan also requires less amount of documentation, a person just has to upload their e-documents when applying online for a loan.
- The tenure of Personal Loan can easily be availed for minimum 1 year and maximum 4 years.
- The Personal Loan provides doorstep services to their customer, they don’t have to visit a bank.
Gold Loan or Personal Loan? What to choose?
Both the loans have their own benefits and limitations, but one should opt for that loan which suits their need. If a person wants to repay their loan on a slow and steady pace then he can opt for Personal Loan. But if your CIBIL score is notably than the average then they may opt for the Gold Loan, as it is quick access to some additional funds.