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Personal Loan or Gold Loan: Which is Better Between the Two?

 Because of its instant availability, it is the most preferred borrowing option in times of necessity. It also works as a Credit Health Tonic, as you may establish your credit history simply by placing your gold in a locker or safe and obtaining a simple low-interest loan.

Personal loans are provided to both salaried and self-employed individuals. The loan provides low interest rates and flexible repayment options. Making before any decisions, it is a good idea to verify the Gold rate in India today. Furthermore, you can apply online or in a branch of a bank or non-banking finance organisation (NBFC). You must also pay the processing fee at the applicable rates. The lender will decide loan eligibility based on your income, credit score, and ability to repay. Following receipt of your application, the lender will obtain your credit report from CIBIL or another credit bureau. 

Types of Personal Loan

Personal loans, unlike gold loans, are available in a variety of forms on the market. Personal loans come in a variety of forms, including the following:

Wedding Loan

You can utilize this loan to cover all of your wedding expenses, which could include everything from guest lodging to acquiring jewelry for the big day. Lenders may provide special incentives on this loan type.

Travel Loan

Travelling is still on everyone’s mind. However, we frequently run out of funds to ensure the same. This is when a travel loan comes in handy. It provides you with the funds you require to fulfill your getaway desires.

Consumer Durable Loans

It is distinct from other types of personal loans. This loan can cover up to 80% – 90% of the cost of a consumer durable. 

Home Renovation/Improvement Loan

This loan can be utilised to renovate or enlarge your current dwelling unit.

Medical Emergency Loan

Dealing with a medical emergency might be challenging if you don’t have the necessary funds. Banks and non-bank financial companies (NBFCs) would provide you with a medical emergency loan to assist you in recovering from this. If all goes according to plan, the loan could get approval and the amount disbursal is faster than other types of personal loans.

Festive Loan

People celebrate festivals with zeal in India. Keeping this in mind, lenders provide enticing holiday loan offers to individuals in need of cash during the holidays.

Which Loan is Better?

Due to the fact that gold rates vary by city in India, there is a huge demand for gold and gold loans throughout the country. A gold loan has a variety of benefits that distinguish it from unsecured personal loans. The following is a list of the advantages:

A gold loan is a secured loan that, unlike an unsecured personal loan, can help you improve your credit score.
Gold is the most popular asset allocation technique among Indians, and because to the high LTV ratio of up to 80%, a loan against gold is the greatest approach to maximize its potential.
A personal loan is normally issued within 2-5 business days, however most lenders release it within 60 minutes.

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