SHOULD WE AVAIL OF A GOLD LOAN OR HOME LONE TO BUY A HOME

So, what are your options for getting out of this situation? You may find the answers you're looking for in a gold loan or a loan against property (LAP). You've arrived at the right spot if you're wondering which of the two would be more profitable in your case. We've pitted the two secured loans against each other in this post so you can see which one would fit best for you in times of financial emergency.

COLLATERAL:-

Secured loans are so named because they are secured by an asset or security that serves as collateral and is held by lenders until the loan balance (including interest and other fees) is fully paid off. If you cannot repay the loan for whatever reason, the lender will recover the unpaid loan balance using the pledged collateral.

INTEREST RATES:-

For all potential borrowers, the rate of interest is the most critical aspect to remember. The interest rates on gold loans are fixed, while the interest rates on loans against property are both floating and fixed. Interest rates on gold loans range from 9.24 per cent to 26 per cent, while fixed interest rates on loans secured by real estate typically range from 9.6 per cent to 11.5 per cent. IIFL's gold loan also provides the lowest gold loan interest rate.

GOLD LOAN PROCESS:- 

TimeGold loans are fast and straightforward to obtain, making them an excellent financial option, especially when cash is needed quickly. The paperwork is minimal since the eligibility requirements are lenient, which speeds up the gold loan process. Gold loans can be approved in as little as a few hours, making them almost instant loans.

CRITERIA FOR QUALIFYING:-

To obtain a loan, you must first be eligible. In the case of gold loans, lenders are less concerned with the applicant's occupation, credit score, and other considerations. This, in turn, benefits all potential borrowers, particularly those who find themselves in a financial emergency, as it increases their chances of having their loan applications accepted. Many lenders would offer a gold loan to anyone aged 18 to 75 as long as the gold ornaments or coins pledged to fulfil the lender's criteria.

FEE OF PROCESSING:-

Lenders charge a service fee to approve every loan. Lenders may charge a gold loan process fee of up to 2% of the loan amount for gold loans. Some lenders, such as the IIFL gold loan, do not charge any gold loan process fees. Lenders charge a transaction fee of up to 2% of the loan sum for LAP, which can vary based on each lender's policy and terms and conditions.

TENURE OF REPAYMENT:-

The repayment tenure is the amount of time you have to repay the lender for the money you borrowed. The EMIs will be shorter as the loan repayment period lengthens, making it easier for you to repay the borrowed funds. However, choosing a more extended repayment period will result in a higher total interest payment.

REQUIRED DOCUMENTS:-

The documentation for a gold loan is straightforward, and the application process does not necessitate a stack of papers. A signed loan application form, two passport-size photographs, and a copy of proof of identity and residence are required of potential borrowers. The list of documents needed when implementing a loan with LAP is a little longer. A signed loan application form, proof of identity, proof of income, and residence proof are required.

Whether a gold loan or a loan against property is better for you is determined by your needs. Gold is a commodity that most people own. It is incredibly liquid and has a high market value. Because gold loans have a short repayment period, they are best for small loans.

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