Personal loans are collateral-free loans, while gold loans place gold as collateral and determine the loan amount based on the gold’s value. 

Whether you get a personal loan or gold loan depends on your financial assets since not everyone has gold to spare. When making this decision, there are some key differences you need to be aware of. 

Difference Between Personal Loan or Gold Loan

• Unsecured vs Secured Loan

Gold loans require gold pledged as collateral (secured), while a personal loan requires no collateral (unsecured). 

• Interest Rate

Gold loan interest rates can go up to 24% p.a. Meanwhile, personal loan rates are usually competitive, starting at 11.99%. You can determine your rate using a personal loan interest rate calculator.

• Loan Amount 

Your lender determines the gold loan amount based on the gold’s value, sanctioning a loan of up to 90% of the gold’s value. Personal loans usually have an upper limit of about Rs. 25 lakhs.

• Repayment

Gold loan tenures are usually between 3 months to 3 years. You can take personal loans for up to 5 years.

• Documents Required

Gold loans also require proof of ownership of the pledged assets. Less documentation is required for personal loans. 

• Processing Speed

Gold loans may take a few days for disbursement. In contrast, personal loans can be approved instantly, with disbursal within 30 minutes if you meet the eligibility criteria.

Understanding these differences ensures you make the right decisions for your finances. With Fullerton India, you get personal loans approved instantly at competitive interest rates and flexible repayment tenures!

Must Read: How Does a Personal Loan Help Settle Previous Debt?