The choice between Gold Loan & Personal Loan

1
The choice between Gold Loan Personal Loan
2
Personal Loan or Gold Loan??? In case there
arises, a question which loan should one opt for?
What are the factors one should examine to
decide? We will try to answer and simplify
through this article to arrive at a better
option. Both loans are known to have a faster
processing time. None restricts the end-use of
loan proceeds and the borrower is free to use the
loan amount in whatever manner he is pleased. To
understand better, we will check out on few
factors and compare these two loan schemes. Loan
amount A personal loan is an unsecured loan and
the amount generally ranges anywhere between
50,000 to five lakhs. Some lenders can offer a
higher amount as well to high-income clients. The
repayment capacity of the borrower is a prime
factor on the basis of which the lender decides
the loan amount.
3
On the other hand, Gold Loan is a secured loan
and the eligibility of loan amount will purely
depend on the value of the gold ornaments that
one offers as collateral to the lender. As per
RBIs rule, the threshold limit of Loan to value
is 75 of your golds value. The lender is least
worried about the income, standing repayment
capacity of the applicant. Loan Tenure Personal
loans are generally repayable in 1 to 3 years. A
few lenders may also grant longer tenure up to
five years. Gold loans on the other hand are
offered for a tenure ranging from 30 days to one
year. The tenure is extendable on expiry in case
interest is served promptly
4
Loan Repayment Personal loans are repayable in
monthly EMI, which includes the principal and
interest amount. There is just one option and the
borrower has to follow it. However, Gold Loan can
be repaid in three different ways as explained
hereunder Bullet repayment (pay the full amount
in a lump sum) or, EMIs or, Repay and service
interest only on monthly basis and pay principle
as a bullet at the end of the tenure. Processing
Fees In Personal loans, the lender may charge
processing fees anything between 0.5 to 2 of
the loan amount. Whereas in Gold loans the
Processing Fee generally varies from 0.1 to 1
which is much lower than that of Personal Loans.
5
Credit history In personal loans, credit
history/ Credit score is very important on the
basis of which lender decides the loan
eligibility of an individual, whereas in Gold
Loans the lender is generally not worried about
credit history of the applicant and lenders gives
credence to collateral rather than credit score.
6
Security safekeeping of Gold The gold
ornaments kept in the home are prone to theft and
damage. If kept in a bank locker one has to pay
rent to the bank. One tend to save this rent
upfront after availing Gold Loan against Gold
ornaments. Conclusion Having understood the
comparative analysis between two loan schemes,
now it is up to the individual to decide between
the two in case the option to choose between the
two is there. Personal loans are good for people
who need a higher loan amount. Gold loans are
good for people who wish to get flexible
repayment options and also have a lower credit
score. If you wish to apply for the Gold loan in
Delhi, apply here.
7
THANK YOU
912, Indra Praksh Building, 21- Barakhamba Road,
New Delhi 110001 Call us at 011-40078601,
9289905548 E-mail at basant.indiaa_at_gmail.com For
more visit https//www.basantfinance.com