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Gold loan vs Personal Loan

By Finserv MARKETS - Jul 26,2019
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Gold loan vs Personal Loan: Which is better?

We Indians have a lot of gold at our homes in different forms – from ornaments to coins to even gold bars. As a matter of fact, India happens to be one of the biggest gold consumers in the world. But unfortunately, we do not use gold in ways that it could benefit us.

The truth is, our gold ornaments and coins are left in the safety locker collecting dust unless there is a special occasion to wear them. In fact, weddings and festivals are the only times when we get to show off our fine collection.

People buy gold during the festival of Akshaya Tritiya and Dhanteras, thinking it to be an investment for the future. But, do you really believe it to be a worthy investment?

Any amount of gold that you own can be beneficial to you if it is utilized correctly. For many years, pawnbrokers and moneylenders have been giving out loans against gold. Today, gold loans can be acquired from reputed financial institutions as well.

Gold being one of the most precious thing for a household, people are always skeptical about keeping it as a collateral hence, they prefer taking a personal loan. Although both gold loans and personal loans function in a similar way, they are still quite different. Hence, it is obvious for people to get confused about how these loans work and what could be best suitable for them.

Personal Loan

Majority of people in India prefer taking personal loans in case of financial emergencies. These loans enjoy large-scale utilization because online personal loan process is quick and easy with minimal documentation. However, the interest rates charged are quite high too.

With a Personal Loan available on Finserv MARKETS, the application process has become much easier. Your loan application will be instantly approved and the amount will be credited in your bank account within 24 hours. After meeting some simple eligibility criteria and submitting your basic documents, you can avail the money that you need. Check personal loan eligibility at Finserv MARKETS.

Gold Loan

If you do not want to avail a personal loan, you might as well consider using your gold for availing a gold loan. Here, the loan amount is solely dependent on the value of the pledged gold. The gold will work as a security for both you as well as the institute providing you the gold loan.

If the loan is not paid back in the stipulated time period, the bank auction-offs your gold to recover the remaining amount. Paying the loan back is simple. You can either opt for paying interest for the tenure of your loan or repay the principal amount when you want to close the loan and get your gold back.

Gold Loan vs Personal Loan

To understand the difference between gold loan and personal loan, here is a rundown of both.

Personal Loan Gold Loan
Security No collateral needed Gold is used as a security
Rate of Interest 12.99% onwards 12% to 24%
Processing Speed Approved almost instantly Most institutes offer immediate gold loans
Processing Fees 3.99% of the loan amount Generally no to very nominal processing fees
Pre-Payment Charges 4% + applicable taxes on principal outstanding No or nominal prepayments charges
Pay-back Options Repayments in Equated Monthly Instalments (EMIs) Only pay interest for loan tenure Principal amount to be paid to close the loan and get the gold back

Advantages of Personal Loan

Personal loans have gained massive popularity in recent years. A large number of individuals across the country avail personal loans to fulfil their financial requirements. Let us have a quick look at some of the major advantages of personal loans that have made it a preferred source of financing over the years.

Multipurpose loan

Since a personal loan is a multipurpose loan, it can be used for various purposes. Be it funding children’s education, managing wedding expenses, travelling abroad or taking care of medical emergencies, a personal loan can be helpful in all these scenarios. A personal loan can also be useful for debt consolidation. If you have outstanding credit card debts, you can avail a personal loan to repay them. This is because personal loan interest rates are lower as compared to credit cards. Therefore, you can save a substantial amount in the long run.

Unsecured loan

A personal loan is an unsecured loan, so you do not have to pledge any collateral while availing the loan amount. This will keep your valuable assets safe if you happen to default on your loan by any chance. However, it is advisable to plan your repayment strategy wisely and repay the loan within the stipulated time. This will help you keep your credit score intact.

Quick loan approval

With leading financial institutions, you can avail an instant personal loan online within a short period. Bajaj Finserv personal loan for self-employed have simple eligibility criteria, attractive interest rate and flexible repayment tenure. You can apply for a personal loan at Finserv MARKETS through a has­sle-free online application process. Minimal documentation, instant loan approval and quick disbursal of the loan amount are some of the added advantages of availing a personal loan at Finserv MARKETS. You can also track your Bajaj Personal loan status online in a hassle-free manner.

Conclusion

Finserv MARKETS do not require any collateral when applying Bajaj Finserv personal loans online. We at Finserv MARKETS make efforts to make the loan application process simple and easy to understand for you. In fact, with us, you can benefit from the features like low EMI, instant approval, minimal documentation and many more.

You can apply for Bajaj Finserv Personal Loan with us, today! Or you can download Finserv MARKETS App and get customized offers on Personal Loans.

More about Personal Loan:

Two-wheeler Loan V/S Personal Loan

Loan Against Property vs Personal Loan: Key Differences

Personal Loan (Online vs. Offline)

“Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!”

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522