Loans are not always planned. At times they may be time constraints, like in scenarios of sudden expenditures or healthcare exigencies. However, availing a loan is not simple. Availing a loan from conventional financial institutions and other banks is a time-consuming process. If you are looking to avail a loan from a lender who may levy a higher rate of interest on the borrowed amount, then the loan may come across as stress and a major burden than help.
In the case, you are in a dilemma regarding which loan option you must choose, read on to get a better idea. Here is a comparative analysis between instant and gold loan to help you make an informed decision.
What’s an instant credit?
Today, banking has become faster, accessible, and paperless, all thanks to the growing technology and acceptance of the advanced technology by most of the consumers. We now are used to a click solution for communication, shopping, studying, booking travels and much more. As an outcome, quick instant loans are expected to be available in times of need. You may require funds for buying considerable assets, medical exigencies, travel expenditures, wedding preparation and others. Unplanned events need instant assistance and quick instant credit options do just this.
Such loans are generally instant in nature that do not need a lot of paperwork to avail. As suggested by the name, instant credit options are processed instantly without the requirement for any collateral or security. The procedure is minimalistic and convenient. Such loans are even termed as quick personal loans. You can take up such instant online loans without the need for approaching any bank or financial institution physically. Instant loans can be applied on the online platform, which saves plenty of time for both borrower and lender.
What’s a gold loan?
India is one such country where the consumers of gold are relatively higher than the global market. This is because this precious metal is looked upon as auspicious and has religious and cultural significance in weddings and rituals. In occasions of financial exigencies, gold can even be utilised to avail a loan. Availing a gold loan today is a more simple and straightforward procedure than traditional credit options. Even if you hold a low score, you can get an approval for a gold loan with minimal paper. However, you must ensure to take good care of not to witness debt traps and borrow just from known and reputable lenders. This is because the loan is secured where you offer your gold as security. Zeroing in on a reputable lender will give you the assurance that your gold pledged as security or collateral is safe and you would get it back in a hassle-free and stress-free way once you repay the complete loan due along with interest.
You may consider opting for reliable lenders like HDFC gold loan, Axis Bank, Bank of India, Bank of Baroda, State Bank of India, etc. Note that as gold loan is a secured option, the interest rate offered on such loans are lower than unsecured personal loans. For instance, HDFC gold loan interest rate begins from 8 per cent per annum onwards while the personal loan interest rate usually begins from 10.50 per cent onwards and goes up to 24 per cent per annum.
A gold loan makes use of the gold as security against loan proceeds. The loan proceeds provided are based on a specific percentage of the value of gold. Parameters like gold’s purity even impact the loan proceeds. Unlike other secured credit options like home loan or car loan, there are not any restrictions on the gold loan proceeds usage.
What are the features and benefits of instant loan?
When applying for an instant loan, you must ensure to upload all documents online, so the method to apply for an instant loan is entirely paperless. In the case you are a pre-approved customer, then you may require submitting minimal documents. An instant credit option is an unsecured loan type and you do not require submitting any collateral or security to place an application for it.
In the case you immediately require funds, an instant credit option would promptly disburse the funds approved to your bank account. The processing period is considerably lesser for such loans than traditional loans. Also, you can customise your loan repayment tenure, as they are flexible and may extend up to twelve months. In the case you hold a strong score, you qualify for a loan with a lower rate of interest. Thus, the instant credit option’s entire cost will be simpler to repay.
What are the features and benefits of a gold loan option?
The entire procedure of availing a gold loan is the same as any other secured credit option. Firstly, you must put forward all your documents linked with gold jewelry and articles to the bank or financial institution. Next, after assessing the gold jewelry and submitting the document, the financial institution disburses the loan proceeds. The loan terms and conditions require you to repay the principal constituent with interest component to get back the gold that you pledged as collateral or security.
Gold loan rate of interest are lower than other secured credit options. The interest charged on the gold loan differs from one lender to another. A financial institution tends to levy lower rate of interest than NBFCs (non-banking financial companies). The gold loan repayment tenure generally ranges between three and twelve months. Based on your circumstance, the lender may permit you a higher time period or even renew the same in the case of any delayed repayments on loan.
So, if you hold no credit profile or score and want an instant loan without offering any security or collateral, you must opt for an instant credit option. However, in the case you are not salaried and fit well with the eligibility parameters and have some physical gold handy, then you may opt for the gold loan option instead of instant loan.