There are some requirements which can only be filled with the help of money and there is no specific loan for the same. If you have a medical emergency in your family or you have to manage some requirements of your home, you have to depend on personal loans. The loan can sponsor a trip or some business requirement. It can also be taken when you have some extra money requirement to run your family for some time. Just few years back, personal loan was the only way out to finance your special requirements but today you can also depend on gold loan. There is always a dilemma when choosing between the two.
Which loan is better to take?
- For gold loan, you need to have gold of good quality and that would be able to finance your requirements. This is very important to apply for gold loan because this cannot be processed without a security. However, for personal loan any such security is not required. However, the gold loan interest rate is lower than the personal loan, so your monthly expenditure on the interest will also be lower for gold loan. You don’t want to pay extra on loan because this will not yield any benefit what so ever.
- Gold loan application does not have eligibility criteria. If you have gold, you can apply for the loan and your amount will be approved based on the value of the loan and not your eligibility. Yes, every bank has a limit to the amount they can approve the loan for and that is how the loan amount is processed and approved. For personal loan, your income criteria are also quite important and everyone is not eligible for such a loan.
- The requirement of documentation is quite less in case of gold loan. You have to submit the gold and declare that the gold belongs to you. You will also need to present your pan card and bank details so that the money can be transferred. Your address will be verified by the bank in order to approve the loan. In case of personal loan, you need more documents, like your bank statement and income proof. Everyone is not provided the loan because they may not meet the eligibility criteria.
- The gold loan is processed within the shortest possible time because there is no hassle of income verification. On the other hand, you have to apply for the personal loan and wait for the approval from the bank’s side. The gold loan is even processed within an hour if the gold is in proper condition. So, if your gold can be verified, the loan will be approved without much delay. In case of any urgent requirement, gold loan is the fastest and ultimate option to trust.
- When you have taken advance from the bank against the gold, you will have the urge to pay it back in time. You will not miss the EMI for any month and there will not be much penalty. In personal loan, there is no mortgage. So, it is possible to miss the EMI and it may pile up to make the condition even worse.
There are so many conditions where you will require money to finance some needs on a urgent basis. You may not be eligible for a personal loan depending on the credit score or the previous loans you have taken. In all those cases, you can apply for a gold loan with the gold asset in your home. This is also given to the housewives who don’t have a proper source of income. That is why it is better to take gold loan than personal loan.