I need some funds urgently and I’m confused between taking a gold loan or a personal loan. Both seem to have their pros and cons. Can someone explain which is better and in what situation?
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Both gold loan and personal loan can help in urgent cash needs, but they work differently. Here’s a simple comparison to help you decide:
Gold Loan
- It’s a secured loan, where you pledge your gold as collateral.
- You can get funds quickly, even with a low credit score.
- Interest rates are usually lower than personal loans.
- Flexible repayment options like bullet payment or interest-only EMIs.
- But if you fail to repay, your gold can be auctioned by the lender.
Personal Loan
- It’s an unsecured loan, so no need to provide any security.
- Your CIBIL score and income decide your eligibility.
- Interest rates are higher compared to gold loans.
- Fixed EMIs and fixed tenure – no flexible repayment.
- Good option if you don’t want to risk pledging your gold.