The number of financing options which provide the flexibility of using the funds when the individual needs instant funding. However, there are certain types of secured loans like a gold loan which emerge as an alternative for personal loans including the benefit of minimal documentation and quick disbursal of the loan. Personal loans and gold loans, both have their own advantages and disadvantages which may prove beneficial or it might become a financial burden for the individual. Let’s look at the advantages and the disadvantages of both the loans so the user can easily choose the loan option which best suits their specific requisites.
Gold loan: Gold loans are secured loans. If the individual owns physical gold in any form like coins or bars. They are great options for short term money requirements if they are in the need for instant funding.
Advantages:
1. Easy processing:
The processing of a gold loan is fast and easy. The documentation involved in a gold loan is minimal and does not include complex documentation. The loan disbursement is completed in hours.
2. Credit history not required:
Customers who wish to apply for a gold loan do not need to worry about their credit history. Financial institutions would not need your CIBIL score or declare any debts, it’s a great way to improve the credit history.
3. Low interest rates:
Since gold loans are secured loans, the interest rates on them are low making it much more affordable for the customers.
4. Flexible repayment:
A gold loan offers flexible repayment options which are generally not offered by other types of loans.
Disadvantages: Since a gold loan is a secured loan, the customer has provided some asset as collateral to the financial institution. The customer is always at risk of losing their asset if they fail to make any of the repayments. Gold loans are offered for short tenures which will result in high EMI payments.
Personal loan: Personal loans are unsecured loans that are the most optimal solutions for generating funds. These types of loans are the best way of getting financial assistance for any situation.
Advantages:
1. No collateral:
The biggest advantage of availing a personal loan is that the customer does not have to provide any type of collateral to the financial institution. The customers will be provided the loan without having to provide any type of asset as collateral.
2. Minimal paperwork:
The amount of paperwork involved in getting a personal loan is minimal. Customers availing the personal loan have to just provide some basic information documents.
3. Quick disbursal:
The personal loan amount is provided is disbursed in to the customers bank account within 48 hours.
Disadvantages:
The customers will have to maintain a good credit history to be eligible for the personal loan as they are unsecured loans, they need some assurance that the customers won’t default on their repayments and the interest rates on a personal loan are high.
Gold loan: Gold loans are secured loans. If the individual owns physical gold in any form like coins or bars. They are great options for short term money requirements if they are in the need for instant funding.
Advantages:
1. Easy processing:
The processing of a gold loan is fast and easy. The documentation involved in a gold loan is minimal and does not include complex documentation. The loan disbursement is completed in hours.
2. Credit history not required:
Customers who wish to apply for a gold loan do not need to worry about their credit history. Financial institutions would not need your CIBIL score or declare any debts, it’s a great way to improve the credit history.
3. Low interest rates:
Since gold loans are secured loans, the interest rates on them are low making it much more affordable for the customers.
4. Flexible repayment:
A gold loan offers flexible repayment options which are generally not offered by other types of loans.
Disadvantages: Since a gold loan is a secured loan, the customer has provided some asset as collateral to the financial institution. The customer is always at risk of losing their asset if they fail to make any of the repayments. Gold loans are offered for short tenures which will result in high EMI payments.
Personal loan: Personal loans are unsecured loans that are the most optimal solutions for generating funds. These types of loans are the best way of getting financial assistance for any situation.
Advantages:
1. No collateral:
The biggest advantage of availing a personal loan is that the customer does not have to provide any type of collateral to the financial institution. The customers will be provided the loan without having to provide any type of asset as collateral.
2. Minimal paperwork:
The amount of paperwork involved in getting a personal loan is minimal. Customers availing the personal loan have to just provide some basic information documents.
3. Quick disbursal:
The personal loan amount is provided is disbursed in to the customers bank account within 48 hours.
Disadvantages:
The customers will have to maintain a good credit history to be eligible for the personal loan as they are unsecured loans, they need some assurance that the customers won’t default on their repayments and the interest rates on a personal loan are high.
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