One of the most challenging jobs in this world is to select among two identical things. And even toughest is when it is regarding something monetary related. In the case of the personal loan and the gold loan, something happens. Still, some differences need to be noticed. Therefore, there will not be an appropriate decision to select the correct option for suitability and meet the requirements that will be needed. So let’s go forward to implement the main difference between gold and personal loan and how they will be used in a better way in our life.
Recently, the finance ministry of India had announced the providing of relief to the customers that there will be an extension of the moratorium period, which were available last year during the pandemic when it just started. The relaxation and the reduction of the limitations and the rate of interest, and the other facilities have made it possible for the customers to keep their loan EMI with the structured format.
For example Manappuram Gold loan rate is having the best facilities for helping the customers. Firstly, an excellent clearance will be there regarding why the gold loan is preferred over a personal loan if it is adequately understood. A gold loan is a type of loan where the loan amount is availed based on the amount of the gold, which The Financial institutions value according to the loan to value ratio. Accordingly, the sanction of the loan amount gets disbursed to the applicant. While on the other hand, if we are talking about the personal loan, it is dependent on the performance of a particular person in his previous loan repayments. If a person has successfully been going through each can he steps and has completed till the last payment instalment. Then it is said to be a good credit score in such cases, and there will be the possibility of getting a loan to a higher extent.
In the case of a gold loan, the rate of interest is very low compared to all the types of loans available in the competition. The reason for such a purpose is that because there is the availability of the security of the gold, which is itself an act asset. It had a value against the fluctuating market like that of inflation or deflation on the basis of gold loan rate per gram. So gold gets the resale value even at that particular time. That is why the gold loan providers find it very much more manageable and the safest way to treat or accept the gold as collateral security or an asset.
In the case of the personal loan, there is a very much higher rate of interest charged because there is a risk factor that plays a vital role due to the non-availability of any kind of collateral security as it is an unsecured loan that is why the loan providers keep the eligibility criteria to a tougher extent in order to make sure that they should not get into any losses in the future. This is because of the personal loan, the only source of income is treated as the source of the repayment option through which the loan amount will be paid, and that is the only thing that is focused upon by the loan provider in case the personal loan for low credit score is also examined.
The documentation process in gold is quite precise and straightforward because only one document is required and nothing more than that. But one should make sure that people always keep a copy of proof of identity, proof of address ownership documents, and passport size photographs nowadays. Moreover, in the case of a personal loan, there are not only these kinds of documents mentioned in the above lines only require, document sets like that of the income proof salary slip business ownership documents of shares if no other security is available.
Conclusion:-
We can see that a gold loan is always far better than a personal loan when it is coming based on trust. Then indeed, the whole loan will always help as a true friend whenever there is an emergency fund requirement.
Also read:- What Is The Easiest Way To Get Personal loan