NEWS & ADVICE : PERSONAL LOAN
Which is better: personal loan or gold loan?
By Vaibhav Aggarwal
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India has always had a fascination for gold. Be it cultural, emotional or any other driving factor gold is found to be an integral part of the investments or savings of almost every Indian household. By far it can be said to have spread out to every community and region and thus brought rural and urban India in the same platform in at least one regard.

So far the gold loan market was dominated by non banking finance companies but gradually banks have also started entering the business thereby giving a clear indication of its viability as an effective loan product. But how good is a gold loan in comparison to personal loans poses a question for the borrower.

A personal loan is mostly an unsecured loan taken by the borrower for a variety of purposes like marriage, purchase of consumer durables, a family vacation amongst others. A gold loan on the other hand is a secured loan taken by keeping gold as collateral.

Since the yellow metal finds itself in most households, so the idea of mortgaging it to meet immediate fund requirements seems to be a lucrative option. But a personal loan scores over gold loan in certain aspects like interest rate, tenor and charges.

Though typically gold loans attract lesser interest than personal loans but interest rates on gold loans are dependant on loan to value (LTV) ratio. This means that greater the percentage of funding sought by the borrower against the value of gold, higher is the interest rate charged by the lender. This is because the lender associates a risk premium with the interest. Also lenders value gold at price lower than the market price so as to hedge themselves from any fluctuations in the value of the yellow metal.

The amount of loan disbursed depends on the credit worthiness of the borrower. A good credit history can fetch the borrower a personal loan at 14-15% interest. This is much cheaper than the rates offered for a gold loan. If the borrower has a home loan running then he can take a personal loan on the mortgaged property thereby making the interest rate even cheaper.


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(Comments Posted : 3) Post Your Comments
1. Greetings to you all! My name is Mr Abdul Majeed, a private and reputable loan lender. I render all kind of loan to individuals with an interest rate of 3% with a repayment length of 1 to 30 years maximum. A lot of people have benefited from my loan offer and it have change their lifestyle positively giving them the opportunity to create their own business.
I render loan such business loan, agricultural loan, education loan, house loan, automobile loan, etc. If you are in need of a loan, kindly fill the borrower form below with your valid details and reply back for more information at abdulmajeedloancompany@gmail.com

Full Name:
Country:
State:
Sex:
Age:
Home Address:
Amount Needed:
Currency Needed:
Loan Duration:
Monthly income:
Phone: Number:
Occupation:
Purpose for Loan:
Website you saw our ads:

Note: All reply should be forwarded only to abdulmajeedloancompany@gmail.com for immediate attention.
Abdul Majeed (Posted: Dec 4, 2015)
2. Gold loan is better compared to personal loan.

Gold loan::
The loans are either offered based on your credibility but if you don’t have considerable financial background then you can avail the loan by pledging something. There are many things like equities, bonds, land, house and even gold that can be pledged for loan. The gold loan is the loan that you can avail by pledging your jewellery.

Personal loan ::
The personal loan is the kind of loan that will be offered to you anytime and for any reason. But it is usually a big dilemma to decide whether the personal loan you are availing is really important or you are just using it for your luxury. The personal loan can be availed for paying the unexpected hefty credit card bills, medical bills, party bills, home furnishing or any other personal expenses.
ravikumar (Posted: Feb 12, 2014)
3. According to me gold loan is the best option as compared to the personal loan. There is no need of credit checks in this offer and loan is disbursed without analyzing the salary structure of the customer. The Gold Loan Rates are extremely low which makes it the best deal to apply for in times of need. Read more at http://goo.gl/V3ncR
Amandeep (Posted: Apr 19, 2013)
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