Personal Loan Vs Gold Loan Smack down: What’s best for you

1. Personal Loan Vs Gold Loan Smack down: What’s best for you Bank and NBFCs offer a personal loan to fulfill your personal loans. Flexibility in personal loan terms may avail you to apply some emergency fund. Apart from Personal loans, there are other loan options are available in the market such as gold Loan. With the benefit of minimal documentation and quick approval, a gold loan can be an alternative to a personal loan. Both kinds of loans are so beneficial for the borrower. They both have their merits and demerits, so beware from all terms before applying for them. Apply for a personal loan or gold loan carefully otherwise it becomes harmful for you. If you are planning to apply for a loan from these two loans then take look at merits and demerits of them. Be a smart borrower and apply with Banknomics. Let’s take a look at these Loans and their pros and cons: Personal loan: Personal Loans are the unsecured loans and best for accomplishing the short term or emergency needs. A borrower can use the personal loan amount for their sister or

2. daughter’s marriage, for Family holidays, for medical needs or any other personal requirements. People go for the personal loans especially in a case of unexpected expenses or in emergency needs. Pros of Personal loan:  No security or Collateral: This is the best advantage of personal loan and makes it unique from others. There is no need to submit anything as collateral for security against the personal loan. A personal loan is collateral free therefore there is no need to arrange collaterals before applying for it. Hence in an emergency, anyone can apply for a personal loan easily. Flexibility: Personal loan provides flexibility to their borrower to apply for any personal purpose. A borrower can apply for a personal loan to accomplish their personal needs like family holidays, Home renovation, wedding, Debt consolidation or for medical emergencies. Less Documentation: The documentation process of personal loan is quite simple and easy as compared to other loans. You just need to submit an income proof, your employer details, and bank statements to apply for a personal loan. Quick and fast loan Disbursement: Most of the Banks or NBFCs Disburse the loan amount within 2 days after a successful loan approval.    Cons of Personal Loan:  CIBIL score and Eligibility for loan: All bank or NBFC checks the CIBIL score of Borrower before the loan approval. A Low CIBIL track can affect your personal loan approval. The eligibility criterion of personal loan is also complex and many limitations are there which can refuse your personal loan application. High-interest rates: Because personal loans are unsecured loans, therefore, their interest rates are usually high as compared to other loans. Prepayment: It’s a major issue in personal loan. Many lenders do not allow their Borrowers to pre pay the loan amount until a particular time period elapsed. Penalties on foreclosure: If the borrower wants to pay off the loan before the loan tenure then Bank and NBFCs charge foreclosure penalties on loan amount.    Gold Loan: A Gold loan comes under secured loan and anyone can apply for it, if they have enough Gold in the form of physical gold (Coins, Jewellery). Gold loan is the best way to fulfill all your short term fund needs easily. In this flexible economy, the gold loan can also help you to raise your funds. If you are going to apply for a Gold loan then keep these things in your mind before applying for a gold loan: Pros of Gold Loan:  Smooth Processing: the processing of Gold loan is very easy and smooth. With little documentation, lenders often disburse Gold loan amount on the same day.

3.  No CIBIL Track required: CIBIL track is not necessary for the gold loan, your gold is enough to prove your worthiness. In fact, it’s a great chance to improve your CIBIL score. Low-Interest Rates: Interest rates of gold loans are also very low as compared to the other loans, therefore, people mostly prefer Gold loan over the personal loan. Flexible repayment options: repayment of the gold loan is very easy. Gold loan offers various repayment options to pay off the loan amount faster. No Foreclosure Penalty: If the borrower is willing to pay off the loan amount before tenure, the lender do not charge foreclosure penalty on Gold loan. This makes gold loan different from the personal loan.    Cons of Gold Loan:  Loss of Assets: In gold loan, if you have fails to pay off the loan amount then lenders can liquidate your assets. In this loan, your assets will always on risk. Short loan tenure: Basically lenders provide only 3 years of loan tenure to pay off the loan. A borrower with high loan amount may fail to pay off the loan. Loss on Margin: Bank and NBFCs offer up to 75% of the Gold value as loan amount to the borrower, Rest 25% of gold value goes to the bank’s margin. It means the borrower never gets the real value of their gold.   Gold loan and personal loan both have their specific features and demerits. A borrower can choose to apply between them as per their situation and requirement. For a Gold loan, the gold is required but for personal loan you don’t need to put any asset as collateral to get the loan amount as personal Loan is an unsecured loan. Banknomics suggest a borrower to keep all merit and demerits of both loans in mind before applying for personal loan or gold loan. Be a smart Borrower and Apply for personal loan with Banknomics India.