Gold loan, Loan Against Property
Thanks to the changing times, people are more open than ever to loans. Loans are no longer looked at as a last resort to meet cash requirements but they also serve as a solution to managing finances. People happily take low-interest loans and pay them off in comfortable instalments as it keeps their savings intact.
A gold loan and a loan against property (LAP) are collateral loans that do not require a person to sell their assets to meet expenses.
Both these loans have a low-interest rate, and there are no restrictions about what you can use them for. Further, there are also minimal eligibility requirements compared to other loans.
The question here is, which option is more suitable – a loan against property or a gold loan?
Difference between a loan against property and a gold loan
Here is a quick guide to the key differences between a gold loan and a loan against property.
Gold loans and loans against property are secured loans.
In a gold loan, the borrower pledges gold articles as collateral. Whereas, in a loan against property, one has to pledge their property as collateral.
With Muthoot FinCorp, individuals can give their gold as collateral and get a gold loan quickly; the purity of their gold must be between 18-24 karat.
2. Eligibility criteria
Getting a loan is dependent on the borrower’s eligibility for such a loan. With gold loans, it is not very important what the individual’s profession is, what their credit score is, or what their background is. This fact alone can be helpful for all potential borrowers, especially when they need an urgent cash injection.
Conversely, the eligibility criteria for loans against property are more rigorous than gold loans.
With Muthoot FinCorp gold loan, getting a gold loan is quick and seamless as the eligibility criteria are easy to meet, and they provide special schemes that suit your needs.
3. Loan processing time
Loan processing time is the time taken to process the loan, which is crucial when someone requires money urgently.
Generally, the loan processing time in gold loans is very less and the loan approval process is seamless. Further, one can get the funds quickly, making it a perfect solution during a financial emergency.
Conversely, the loan processing time is more in a loan against the property than a gold loan, as lenders take time to check the documents related to the property.
With Muthoot FinCorp, getting a gold loan is hassle-free, and the loan is processed instantly. Once the documents are submitted, the loan amount gets processed within 30 minutes.
4. Repayment tenure
Repayment tenure plays an essential role when deciding which loan to take. The higher the repayment tenure, the lower EMIs the borrower has to pay and vice versa. However, a longer tenure leads to the loan being ultimately costlier.
The gold loan usually comes with a short repayment tenure and can be repaid even in a year or 2 to 3 years.
On the other hand, a loan against property comes with a very long repayment tenure, i,e., around 10-20 years.
With Muthoot FinCorp, individuals can get flexible repayment tenures that suit their needs at an attractive gold loan interest rate and LAP interest rate.
5. Documentation requirements
Gold loan application processes are responsible for helping borrowers and lenders to expedite the whole loan process so that they may obtain their loan without the hassle of going through too many steps. Lenders require only a few documents, and the loan gets disbursed.
However, when it comes to a loan against property, the documents required are more than gold loans, as the lender may ask for proof of income, identity, and a place of residence.
A gold loan or a loan against property, which is better, will depend upon the individual’s needs and requirements.
If individuals have a short-term need, they can go for a gold loan, whereas property loans are better for longer-term needs as their repayment tenure is higher than gold loans. Further, they can also receive a higher loan amount in a loan against property.
For an urgent cash requirement, borrowers can take a gold loan as the loan processing time in a gold loan is less than a loan against property.
Borrowers can get gold loans and loans against property from a trusted lender like Muthoot FinCorp as per their requirements.