Advantages Of A Gold Loan Over A Personal Loan

Augmont Indian households are invariably attached to the precious metal they own emotionally. Indians are deeply connected to gold and are likely to keep jewelry, coins, or bars made from it. Even in the most basic areas of the country, it is frowned upon to trade family-owned gold assets with pawnbrokers or formal money lending institutions. Indian families do not usually liquidate their gold assets even in urgent financial crises. Thus, the monetary worth of gold investments in India is seldom realized.

The Gold Loan is better than an individual loan

Experts are of the opinion that experts agree that a Gold Loan near me is better than personal loans. The borrower who needs to fund any business or personal expenses, such as marriage expenses or purchases, can take out gold loans and personal loans.

Here are some of the differentiators between gold loans and personal loans:

Collaterals

Personal loans are not required to meet collateral requirements. However, gold loans can be approved and require collateral.

Cost of raising the funds for

Banks aren't permitted to provide collateral for personal loans. The lending institutions then scrutinize the loan applicants' income evidence documents. They then charge small processing charges for personal loans. The processing charges for personal loans generally vary from 0.5 percent to 1.5 percent of the amount of loan. When applying for a instant gold loan loan, the borrower does not have to provide income proofs since they use their gold assets as collateral. This omits out the expense of processing charges.

Timeline

Most financial institutions scrutinize the income of proof documents in the absence of collaterals when they are approached for personal loans. They also perform thorough due diligence to ascertain that an applicant has adequate repaying capacity. This is a lengthy process and can delay the decision to approve the loan. The process for gold loans is easy. It's simple the borrower has to submit their gold assets as collateral, and then sign a few documents. The loan amount is granted immediately afterwards.

Amount of Loan

While lending institutions can offer personal loans as much as Rs.40 lakh to borrowers, those who apply for gold loans can leverage the loan with a higher limit on loan amounts. The maximum amount that banks and NBFCs will allow for loans in gold is INR 5 million. If you are looking to take out larger quantities of cash should think about the option of a gold loan.

Low-Interest Rates

A broad comparison between gold loans and personal loans shows that gold loans have lower interest requirements. A gold loan is approved at interest rates that range between 11-13%. However, personal loans are loan that is sanctioned at interest rates that range between 16 and 22 percent. A borrower means that the expense of getting the money for a gold loan is lower than the cost of getting personal loans. This makes the repayment of gold loans a tad bit easier than repaying personal loans even if they are built with the same amount.

Flexible Repayments

For gold loan online Borrowers can select from a variety of repayment options. For instance, they can choose the standard EMI option to repay the gold loan. The borrower can pay the loan amount in installments and pay back the interest over the duration of the loan. Borrowers may choose to pay the loan amount and interest at the conclusion in one lump-sum payment.

Conclusion

Gold is still the most preferred investment choice for the majority of Indian households. Investors have many choices for purchasing the shiny metal because of the consistent rise and decline of gold prices. In the long run gold is an excellent investment as it offers the possibility of borrowing money. It's fair to say that borrowing on gold assets is much more lucrative than personal loans.