Why Gold Loan is better than a Personal Loan

 

A gold loan is a credit against gold. Under this loan, a gold loan is considered as a security and taken by banks/NBFC. The amount is given to the borrower against this gold as insurance. Also, the interest rate on the personal loan is higher than the gold loan. Whereas a personal loan is also called an unsecured loan, as no security is required to apply for a personal loan. A personal loan is approved by looking at the borrower’s credit score. There are some features of Indian Overseas Bank Personal Loan-

• Loan amount: The maximum loan amount that one can get through an Indian overseas bank personal loan is Rs. 15 lakh. The loan amount you are actually eligible depends on multiple factors such as your credit score, age, income, etc.
• Flexible tenure: It offers various repayment options along with a flexible tenure that goes up to 84 months and can be availed as per your repayment ability
• Online application: One doesn’t have to go to the bank and fill out, submit paper documents to apply for an Indian Overseas Bank personal loan as it can be easily applied through the comfort of our home.

So why gold is considered a better loan than a personal loan:

• Eligibility: Any person who is above 18 years can apply for the gold loan and there is no minimum income required as you’ll be getting a loan against the gold. However, on the other side, you have to be in the Personal loan eligibility criterion to apply for a personal loan, a salaried employee should have a minimum income of Rs 10,000. An applicant should have a minimum of 650 credit score. Whereas, in a gold loan, one does not need a credit score to avail for a loan.
• Repayment Option: Personal loans have an option of repayment in the form of EMIs on a monthly or yearly basis, however, in some gold loan schemes lenders allow the borrowers to pay the interest every month, and the principal amount can be paid on maturity.
• Processing Fee: The processing fee will help you to decide which loan to take. Gold loans come with processing charges as low as Rs. 10 and some lenders charge 0.10%-2% of the loan amount. In personal loans, the processing fees go up to 3%. So, comparing the processing fee carefully will help you to make a good decision. So it still depends on the one, which loan they think is best for their requirement and they can choose wisely.

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