5 Reasons why Gold Loan is a much better option than a Personal Loan
Gold is the precious procession for many. We all have several emotions entwined with the gold which we’ve collected, whether it is from a marriage, present, or other events. The value of gold would mean nothing to do if you keep it safe in the lockers. If you’re need in money, the gold you own can be your saviour instead of going after unsecured loans and burning your pockets deeply.
In this article, we will present before you the key pointers on how gold loan may be a better option than a personal loan
Rate of Interest
Personal Loan interest rates start from 10.5% whereas the gold loan interest rates start from 7.35%. So getting a gold loan is a much cheaper option than personal loan as you pay a lot less interest.
For Gold loans, most banks do not lay a foreclosure charges, which is the amount that you pay to close a loan. However, for personal loan, levy a pre-payment charge upto 5%. Also the point to note is that you can retrieve the gold only after you’ve completed the full loan.
Payments towards Interest
Gold loans are flexible in the sense you can pay only the interest amount at the beginning and pay the principle at the time of closure. This method of payment is unique to Gold Loans. Since, it’s a secured loan and banks have gold as the security, they would be much obliged to allow you to make the payment towards the interest portion alone.
For most kind of loans, banks scrutinize your credit score before taking a call to sanction the loan amount. The credit score plays a vital role in determining your prospects especially for personal loan. However, with gold loans, since you are mortgaging your gold, banks don’t worry about credit history. The only factor which determines the exact amount that you are going to get is the current value of the gold in the market.
Since you pledge the gold and collect the loan amount, gold loan processing in most cases is instant with minimal documention. Whereas for personal loan, there is a whole lot of background checks involved including your credit score, employment verification, and document verifications.
Gold loans like personal loans can be used to fulfill urgent requirements like medical emergency, child education, or home repairs. Several lenders provide gold loans at an attractive interest rate. Fincover has a wide collection of banks and NBFCs who provide gold loans at the most flexible rates. If you’re in need of a gold loan, leave us a message and we’ll get back to you at the earliest.