Why Is Gold Loan A Good Option For Quick Money

If you are confused between gold loan vs personal loan then it is important to evaluates and selects the right borrowing instrument to best meet your requirement.

19 Jun,2022 09:17 IST 236 views
Why Is Gold Loan A Good Option For Quick Money

There may appear a time when you face a financial crunch. You have no way to take out that extra cash from your rainy-day fund or you may not have such a fund. Considering that personal loans have steep rates of interest, gold loans are the next best option. Fortunately, banks and non-banking financial institutions (NBFCs) have changed the way credit markets operate in the current time.
Today, the general consumer is beginning to understand the potential of a gold loan. When you compare gold loans vs personal loans, it is safe to say that gold loans are a much more popular option compared to personal loans. Here are some of the top reasons that make gold loans a prime choice.

Ease Of Disbursal For A Gold Loan vs Personal Loan

The disbursal of a personal loan depends on your monthly income. It guarantees ease of availability and disbursal. Financial institutions also check your credit score. You may use the funds for any expenditure as you deem fit.
For gold loans, too, you can use the funds to your liking. However, there is no dependence on credit score. However, such loans are secure with your gold jewellery deposit.

Collaterals And Processing Time

Personal loans do not need any collateral except for proof of income. Gold loans always require backing with gold jewellery, based on which the amount is sanctioned and disbursed. The latter rarely takes any time for processing when compared to personal loans.

Documentation For A Gold Loan vs Personal Loan

Personal loans need extensive documentation from salary slips or income proofs to documents verifying your identity and residence. For gold loans, borrowers do not need to provide proof of income documentation.

Processing Charges

There are no processing costs associated with gold loans. On the other hand, personal loans always attract a processing fee that varies between 0.5 to 1 per cent of the overall loan amount.

Tenure Of Loan

Once a lender receives an application for a personal loan, it begins an extensive process of researching or analyzing the borrower's repayment capacity. However, for gold loans, no such research is involved. Gold assets are already offered as collateral against the loan.

Flexibility Of Repayment

Gold loan repayments have more flexibility than personal loans. These are accommodating to customers because a secured loan always guarantees payments on time. While the EMI payment option is standard and basic, you can pay the interest per month and the principal at the end of the loan tenure. You can also pay the total principal with interest in a lump sum at the tenure end. With personal loan repayment, you need to make EMI payments based on the predetermined interest rate with minimum flexibility.

Rate Of Interest

When you compare the interest rates of a gold loan versus that of a personal loan, the former rates are always lower. The main reason is that a gold loan is secured while a personal loan isn't. The usual range of interest rates for goal loans is 11-13 per cent. For personal loans, this range varies between 16 and 22 per cent.

Gold Loan vs Personal Loan

Given that Indians have a penchant for buying gold and consider the yellow metal a good investment, gold loans are far easier to get hands-on for a borrower. Over the long term, gold offers a profitable opportunity for obtaining a loan. No wonder it is a far better option than a personal loan.
IIFL Finance offers gold loans at feasible interest rates and easy repayment options. Quick disbursal in less than 30 minutes and maximum value for your gold—is an IIFL promise.

FAQs

Q1. How Does IIFL Calculate The Loan Amount For Gold Loans?

Ans. Since goal loans are secured financial products, IIFL Finance calculates the loan amount as per the presented value of gold. Only gold parts, non-inclusive of stones, gems and other metals—are weighed and calculated to arrive at an estimated loan amount.

Q2. Is There An Online Tool On The IIFL Website To Calculate Gold Loan Eligibility?

Ans. You can use the online gold loan calculator on the IIFL Finance website to calculate what gold loan amount you could be eligible for.

Q3. How Quickly Can IIFL Process My Gold Loan?

Ans. The average processing time for gold loans at IIFL Finance is around 30 minutes. You need to provide all documents and gold to begin the gold loan process at IIFL.

Q4. Are There Any Special Offers Available On Gold Loans At IIFL?

Ans. Yes, IIFL Finance announces special offers on gold loans from time to time. Visit your nearest branch or their website to know more on the same.

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