4 reasons why gold loans are preferred over personal loans

Mihir Sen
Mihir Sen
Aug 23, 2017 · 3 min read

If you need a loan and have some amount of gold with you, then it’s time to discard the personal loan route and opt for gold loans. Though, many of us have emotions tangled with our gold jewelry and thus, we prefer to keep them safely in lockers. Although, this perception is changing now and many of us are using this gold to raise short-term loans that have low interest rates as compared to that of personal loans. Hence, here are the 4 reasons why gold is better than personal loans in order to meet your short-term financial needs:

Gold Loans — Advantages and Benefits of taking a gold loan to meet short-term financial needs

Rate of Interest: As compared to the personal loans, interest rates on gold loans are cheaper. Besides, you can negotiate the interest rate, if you pledge for higher value of gold for availing loan.

Monthly Installments: In case of personal loans, your EMIs are calculated on the basis of your credit history and repayment capacity. Thus, people with less income usually end up paying high EMIs. But, with a gold loan, you don’t have to worry about less income and bad credit history, as they are secured loans and the only factor that plays an important role in determining the loan amount is the value of the gold.

Gold Loan — Monthly Installments

Documentation: Gold loans are secured loans and thus, they require minimum documentation. All that you need to do is to provide a copy of your photo ID and an address proof.

Gold Loans — Minimum Documentation Required

No pre-payment penalty: A gold loan is preferred over personal loan in terms of pre-payment charges as well. In case of a gold loan, you can pre-pay your loan anytime and banks will not impose a penalty. Although, in case of personal loans, banks levy a pre-payment penalty on the outstanding loan amount.

Gold Loan — No pre-payment penalty

Henceforth, in the battle of gold loans and personal loans, gold loans win on various grounds. For those, looking for a convenient, hassle-free loan against your gold asset can easily apply for a bank loan online on Yes Bank.

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