You will be encountering lots of situation in life where you will need urgent cash. In such delicate situations, you will first try seeking help from your family and friends and if you do not get any help from them, you turn your focus on getting a loan from a lender or a bank. Coming to banks, there are many loan options available which are designed to help you out in situations like this. But when it comes to needing urgent funds, there are only two options available, personal loans and loan against gold.
These loans are the best out there when you are in urgent need of money and can help you with quick disbursements. Now, let’s assume you encounter such a situation and one of your friends suggested you both the options to with. You are in a confused state on which loan should you choose, we are here to help. Here is a quick look at the pros and cons of these two loans and also a quick suggestion on which one you should choose if you are in need of a loan.
In this type of loan, you will need to keep collateral as the loan name suggests, that is gold. The gold can be in any form and structure and it will be with the lender until you do not pay the loan off. This is one type of a secured loan and can help you if you are seeking a short term loan. DO make sure that the payment is done on time or else the lender has the power to confiscate the gold you kept as guarantee at the lender.
No credit check
In this type of loan, the lenders do not perform a cibil check on your profile. As you will be keeping the gold as collateral, it does not matter if you are in the lower side of your credit.
The banks and lenders are ready at your disposal to give you immediate money when you show up with your gold. In some cases, the loan gets disbursed within fifteen minutes.
Low interest rates
The interest rates are low as compared to the other loans and especially compared to personal loans. This means you will be repaying fewer amounts as interest and contributing more to your principle amount.
No pre-payment penalties
In other loans, if you decide to make a pre-payment towards your principle amount, you will have to pay some pre-payment charges. This is not the case with gold loans.
The banks only provide you loan of up to 75% of the value of your gold.
Risk of loss
Because this is one type of secured loan, if not paid in time, you are at risk of losing your asset.
This is one type of unsecured loan which is high in demand in the loan market. You can easily avail this loan and can use it according to you will.
In this loan the paperwork is minimal and the disbursement is quick. You can opt for this loan within hours and the amount will be credited to your account in no time.
This is the best part of this loan, even if you are opting for a huge sum of loan, you do not need to keep any collateral and get your loan easily.
You can use the loan amount according to your wish without any restrictions from the lender.
This plays an important role if you are looking to get a personal loan. You can get a personal loan for bad cibil score, but the interest rates are off the roof.
High interest rates
This loan has the highest interest rate as compared to any other loan in the financial market.
In the end, we would suggest if the requirement is quite urgent and you have a good amount of money coming in in the immediate future, you should go for gold loan as it is easy for getting processed and you can repay your loan in no time.