Gold Loan or Personal Loan? Which One To Choose When in Need?

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    Every one needs money during an emergency, but, how soon and hassle free a loan can be is always a big question mark!

    In case of emergency such as medical or accident, one cannot keep looking for documents and eligibility or wait for amount to get disbursed. Gold which has been accumulated over a period of time can come in handy as they can be pledged for a gold loan.You can also opt for a personal loan.


    Here's a quick comparison between the two set of loans.

    Gold Loan or Personal Loan? Which One To Choose?


    To avail a gold loan a certificate of your salary or income and credit card history is not required. While, unemployed and non working people can go for gold loan. Eligibility depends on the gold you hold.

    Personal Loan is given to salaried, self employed or professional only and persons credit history should be good. Eligibility depends on the income and repaying capacity.


    Gold loan doesn't require many documents, only few documents such as ID proof and address proof is enough.

    To avail personal loan, one needs to submit the latest 3 months salary slips, 6 months Bank statement reflecting salary credits updated within last 15 days, identity proof and address proof. In case of any other loan one needs to submit loan schedules and bank statement showing EMI debits. More details on Personal loan.

    Interest Rates

    Gold loan interest rates are lower as compared to personal loans and this is probably the edge. Usually loan over gold is provided at the interest of 12-16% per annum. Check the interest rates here.

    Personal Loans are available at interest rates of 15-26% per annum depending on your creditworthiness. Check interest rates on gold loans here.

    Duration of the loan

    To process gold loan it takes only few hours, during emergency this is the best help. Loan tenure can range from one year to 3 years. Some banks don't even charge for pre-payment of loan.


    Personal loan takes few days and after in depth verification loan is sanctioned


    Processing fees are not charged in gold loan. However, they are charged fro valuation of gold.

    Whereas, to process personal loan banks do charge 2-3% processing fees.

    So, after looking at most of the parameters, gold shines as compared to a personal loan. Check to know why you should never take personal loan in India.

    Read more about: gold loan personal loan
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