Gold Loan Vs. Loan Against Property - Differences You Must Know

Life is an endless cycle of ups and downs where the need for capital is constant. Whether to cover personal expenses or invest in a business to earn profits, people need adequate funds to ensure the effective coverage of expenses. Most people raise capital through various loan products. Two of the most widely utilised loan products are a loan on gold jewellery and a loan against land property.

Gold Loan Vs. Loan Against Property - What’s The difference?

Here are the most distinctive differences between a loan on gold jewellery and a loan against a house property:

• Loan Amount

Before applying for either loan, analyse the current value of the gold ornaments and the house property. Lenders such as banks and NBFCs approve the loan amount based on the value of the gold or the immovable asset, which is generally 75% of the total value. Analysing both assets will determine the one with the higher weight and fetch you the highest loan amount.

• Loan Tenure

A gold loan has a tenure of up to 24 months, within which the borrower has to repay the loan amount. However, a loan against property is a long-term loan with a tenure of up to 18 years.

• Collateral

Gold loans require pledging gold ornaments as collateral, while a loan against property requires pledging an immovable asset such as a house or land as collateral. Hence, gold loans are considered more flexible and quick than loans against property.

• Approval and Disbursal

The application process for a gold loan is completely online and is quick and straightforward. Lenders approve gold loans within 5 minutes of application and disburse the loan amount into the bank account.

The application for a loan against property is extensive. It may take days to approve, and the lender disburses the loan amount into the borrower’s bank account.

Avail Of An Ideal Gold Loan With IIFL Finance

With IIFL Gold loan, you get industry-best benefits through our process designed to offer instant funds based on the value of your gold . IIFL Finance Gold Loans come with the lowest fee and charges, making it the most affordable loan scheme available. With a transparent fee structure, there are no hidden costs you have to incur after applying for the loan with IIFL Finance.