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What Will Work Best for You: Gold Loan or Personal Loan?

Gold Loan or Personal Loan

Indians attach a lot of sentiments with their gold. Therefore India is the biggest Gold consumer in the world. Ahead of Dhanters, Akshay Tritiya, or Navratri, marketplace comes up with lot of offers and schemes on the sales of gold and Personal loan to fulfil the upcoming requirements of festivities.

You can get instant liquidity against your gold without parting them off. To avail cash against gold, several leading financial institutions have made it possible, in recent years.

Although both the kind of money lending works in similar terms, they are quite different. Often the functioning of personal loan and the gold loan is confused by people. Here is the detailed information below, how both the function of the loan.

Why It is a wise decision to go for Personal loan is the fastest growing option for consumers today. It is the loan for all-purpose, where there is no collateral required. These days with the invent of technology, one can apply for a personal loan sitting at the comfort of their home.

In times of emergency needs, one can get the funds at a very short span. The interest rates are lower and are availed for long periods. There is no collateral required and one has to submit minimum documentation to avail the personal loan.

Ranging between Rs 15000 to 10lacs there is a variable range of amount and one can avail as per their requirement. Some times of personal loans are available with additional benefits like insurance coverage.

Time to time, financial lenders keep on announcing schemes and offers for personal loans. Personal loans are great. If you find yourself in a financial ditch, personal loans come as a huge support to rely on.

Loan                                     Interest Rates*                            Processing Fees
In the range of 0.5% to 1%
Up to 2.50% of loan amount
(Min Rs. 1,999; Max Rs. 25, 000)
Up to 2.25% per annum of
loan amount + GST
Bajaj Finserv
Up to 3.99% of the loan amount/td>
Up to 2.0%
Up to 1% of loan amount
Axis Bank
Up to 2.00%
Tata Capital
Up to 2.5% + GST
Fullerton India
Up to 6.50%
IndusInd Bank
Min 1% to Max 2.50%
Kotak Bank
Up to 2.5% plus tax
RBL Bank
Up to 3%
Up to 2% + GST
HDB Financial
Up to 2% of loan amount
Karur Vysya Bank
0.30% (Min Rs. 500)
1.80% + taxes
Vijaya Bank
0.10%, Max. Rs. 10000 + ST
Union Bank of India
0.50%, Min Rs. 500
Syndicate Bank
0.50%, Min Rs. 500
Standard Chartered Bank
Indian Overseas Bank
Andhra Bank
Case to Case
Bank of Baroda
2%, Min Rs. 250
Bank of Maharashtra
1%, Min Rs. 1,000
Canara Bank
Corporation Bank
1.50%, Min Rs. 500
Dena Bank
Federal Bank
0.5%, Min Rs. 500
1% + applicable taxes
Allahabad Bank
1.06%, Min- Rs. 1068
Indian Bank
0.51%, Min- Rs. 510
Yes Bank
Starting at 0.99%, Up to 2.5%

Gold loan vs Personal Loan

Gold loan is a credit which can be procured by pledging Gold as collateral to the lender. Anyone who owns gold can apply for a gold loan. Be it jewellery or even gold coins. It is one of the easiest way of getting loans.

In recent years many leading financial institutions and NBFC’s have come up with several schemes and offers to help people with gold to avail loans in order to meet their financial expectation. One of the major drawbacks of gold loan is that if one is unable to repay the loan amount, the results are hazardous.

The prices of gold loan keeps fluctuating, therefore to obtain gold loan, the calculation of loan value is done in different ways. Some calculate the gold value of gold value of last two weeks prices, and then take an average price in determining the rate per gram of gold, while some take the daily valuation of gold for evaluating the rates. Consider which plans suits you the best and which plans gives you a higher value to your gold.

Gold loan is offered by lenders for a short period of time as compared to personal loan and hence it is risky for the consumer. Many times there arises financial emergencies where we fall short of finances and unable to repay the loan. This increases the chances of getting our collateral seized by the lender. The penalties levied upon non-repayment of the loan amount is huge and risks are involved with it.

Top Lenders Interest Rates

Name of the Bank 
Interest Rate (p.a.) 
Loan Amount 
Loan Tenure  
10.0% to 16.70% 
Rs.10,000 to Rs.15 lakh 
6 months to 12 months 
Axis Bank 
15% to 17.5% 
Rs.25,001 to Rs.20 lakh 
6 months to 36 months 
HDFC Bank 
10.1% to 16.05% 
Rs.10,000 onwards 
6 months to 48 months 
Canara Bank 
Rs.10,000 to Rs.10 lakh 
12 months 
Muthoot Finance 
0% to 27% 
Rs.1,500 onwards 
7 days to 12 months 
Bajaj FinServ 
12% onwards 
Up to Rs.10 lakh 
Up to 240 months 
State Bank of India 
Rs.20,000 to Rs.20 lakh 
12 months to 36 months 
Kotak Mahindra Bank 
10.5% to 17% 
Rs.25,000 to Rs.25 lakh 
3 months to 36 months 
IndusInd Bank 
11.25% to 15.50% 
Up to Rs.10 lakh 
3 months to 12 months 
Manappuram Finance 
Up to 29% 
Up to Rs.1.5 crore 
3 months

Above points mentioned will assist you in deciding which options to choose from, for your emergency financial demands.

As Gold loan is stringent and involves lot of risk factors, in terms of penalty and higher chances of not getting back on defaulting, it is suggested one should go for Personal loan.

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