Loan Tips: A gold loan is better than a personal loan due to these reasons, many benefits are available

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Why gold loan is better than a personal loan

A gold loan is considered a secured loan so the amount raised from it carries lesser interest than an unsecured loan

Whether there is a sudden expenditure or a plan to travel, Personal Loan is a great way to meet the personal needs of the people. However, you can also fulfill such needs with a gold loan. But even today people rely on personal loans instead of gold loans for many reasons, although let us tell you that in many ways gold loan is a better option than a personal loan (Gold loan vs personal loan). If you also have extra gold and need money then also consider this option

The interest rate is low

A gold loan has lower interest rates as compared to a personal loan. Actually, a gold loan is a secured loan because you give gold in the bank for the loan, then due to less risk, the bank also takes fewer interest rates. According to the information given on BankBazaar.com, gold loan starts from the low levels of 7.1 percent. Wherein personal loans start at 8.3 percent even in the best of situations. Generally, gold loans are 1.5 to 2 percent cheaper than personal loans.

The loan is issued in a very short time

If the personal loan is not pre-approved, you may have to wait for a few days to get the loan. Actually, after checking your paper, the bank takes some time to release the loan amount as per your eligibility, although the gold loan can be issued to you in a single working day. Actually, all the math in this depends on the valuation of your gold, which takes just a few minutes. At the same time, money is issued to you after completing the paperwork. That is if you do not have any connection with the bank and you need money immediately, then the gold loan is a good option.

The gold loan will help if the credit score is bad

If you have a bad credit score, you may get a personal loan at higher rates or your application may get rejected. However, in this situation, you can take a loan against gold. Your credit score will also be seen here. But because the gold loan is a secured loan, you will get the loan. It is possible that in view of your ability to repay the loan, the loan to value i.e. the ratio of loan to gold price may be decided by the bank on the basis of its rules.

Gold is safe

If you are taking a loan on gold from any big bank, then here you get a double benefit. In fact, gold is kept safe in a gold loan just like it is in the bank's vault. That is, your gold remains safe in the bank and you get money in return. The only difference is that you will be able to use this gold only when you repay the loan in full. Many times, businessmen convert the extra gold kept in the house into a short-term gold loan for this reason. Due to which not only the gold remains safe in the bank, but the money received from it is used in business activities.