Many individuals commonly take out both personal loans and gold loans to meet their financial needs. The process of taking out such loans has been simplified, enabling applicants to take out instant personal loans. Let us look at the factors you must check before applying for an individual or gold loan.
6 Things to Consider Before Choosing a Personal or Gold Loan
While applying for a personal or gold loan, it is best to check for certain factors. Here are 6 important factors to consider.
1. Loan Amount
The most important factor to check is the loan amount offered by the bank or lending institution. Typically, the personal loan amount ranges between Rs. 50,000 and Rs. 15 Lakhs. Some lenders extend their limit up to Rs. 40 Lakhs. The loan amount offered depends on the applicant’s repayment capacity and the chosen tenure. The loan amount also depends on the lender’s LTV (loan-to-value) ratio and collateral for gold loans.
2. Interest rates
Check the interest rate offered, as it would help you plan your repayment. Usually, the interest rate on a personal loan varies between 10% and 24% per annum, whereas the interest rate of gold loans ranges from 7% to 29% per annum.
3. Repayment Tenure
Usually, the tenure for a personal loan ranges from 1 year to 5 years. Some lenders extend their tenure up to 7 years. The tenure for a gold loan goes up to only three years.
4. Disbursal Time
The applicant has to submit ITR forms and payslips while submitting the application form. The process of verification of the submitted documents typically takes some time. Usually, the disbursal process takes between 2 days and seven days. However, pre-approved personal loans take less time. Gold loans have the least disbursal time compared to other loans.
5. Processing Fees
The processing fee varies depending on the bank and the type of loan. The processing fee varies from 1% to 3% of the loan amount for a personal loan. For a gold loan, the processing fee is up to 2%. At the same time, some lenders offer a fixed base charge of ₹ 10 and add up to this base charge.
6. Poor Credit Score
Several banks thoroughly check the credit profile of applicants. Personal loans are unsecured loans that require the applicant to prove their creditworthiness through their credit score. Gold loans are secured loans that are backed by collateral.
How to Apply for a Personal Loan?
Finserv MARKETS has simplified the application process for a personal loan. To apply, follow these five simple steps.
Step 1: Navigate to the personal loan application page on Finserv MARKETS.
Step 2: Fill in your details, such as your name, mobile number, credit report, etc.
Step 3: Check your eligibility for a personal loan and choose a suitable personal loan tenure and loan amount based on your needs.
Step 4: Verify your identity. Once your identity is verified, the money will be credited to your bank account.
In a Nutshell
Opting for a personal loan or gold loan can meet your financial needs. You can use a personal loan on Finserv MARKETS and enjoy benefits like quick disbursal and an easy application process.