Why is Gold Loan Better than Personal Loans?
Banks everywhere have showcased their personal loans as their flagship product, but it must be said their interest ranges from 12% to a whopping 28%. While calls from the respective banks may show them as easy to apply and get, they do come with their own complication. When compared with gold loans personal loans may seem as a better alternative as there is no collateral to pledge, here are 5 reasons why the gold loan is still better than a personal loan.
Lower Rate of interest
Gold loan rate of interest is cheaper compared to an ‘unsecured’ personal loan. A loan against gold can be obtained for 13%–16%, whereas the rate of interest on a personal loan hovers between 12% and 24%. Added to processing costs and service charges a sizeable chunk of loan is spent on the loan provider itself. On the other hand, gold loans are pretty straightforward when it comes to processing.
When compared with a gold loan, a bank’s personal loans comes with a long list of required document as well documents which need to be safeguarded. Since Indel’s gold loans are of a secured nature loan, only minimal documentation is required. All someone needs to avail a gold loan is to produce a copy of a Govt mandated photo id and address proof.
Quicker Loan Disbursal Time
When compared with an average personal loan’s disbursal time, a gold loan is considerably quicker, the disbursal time for an average gold loan will take as less as 5 minutes only. Since the Gold loan is a secured loan, the banks or NBFCs do not need to invest time in a detailed due diligence, while this is a norm for personal loans. So the approval and disbursal time is comparatively longer when it comes to personal loan.
No Credit History Required
When it comes to gold loans, financial institutions do not take credit history into consideration. Instead, a completing a gold loan is actually a great opportunity to improve an individual credit history.
Indel Money is a Non-Banking Finance Company (NBFC) regulated by the Reserve Bank of India (RBI). We received the NBFC license in 2002 and is registered with the RBI, bearing Reg. No. B 13. 01564. We conduct our operations through 136 branches spread across two states, Tamil Nadu & Kerala and keep on expanding our presence across India with a clear vision towards the future.