Many individuals commonly avail both personal loans and gold loans to meet their financial needs. The process of availing such loans has been simplified, thereby enabling applicants to avail of instant personal loans. Let us look at the factors you have to check before applying for a personal loan or a gold loan.
6 Things to Consider Before Choosing a Personal or Gold Loan
1. Loan Amount
The most important factor to check for is the loan amount offered by the bank or lending institution. Typically, the personal loan amount ranges between. 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 depends on the LTV (loan-to-value) ratio of the lender and the collateral when it comes to gold loans.
2. Interest rates
Check the interest rate offered as it would help you plan your repayment. Usually, the interest rate on the 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 3 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 up some time. Usually, the disbursal process takes between 2 days and 7 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?
Step 1: Navigate to the personal loan application page on Finserv MARKETS.
Step 2: Fill in your personal 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.