Gold loan

There are situations in life when we may need some financial assistance. It could be a sudden medical expense or an unexpected cash crisis or paying an education fee. In such situations borrowing money from dear and near ones may not always be an option for all. Muthoot FinCorp can help you sail through such situations with ease. But at such times, one might be confused about which type of loan to take. That’s why we bring you here to mark the comparison between the two popular kinds of lending- Gold Loans and Credit Card Loans.

Why is a Gold Loan Better Than a Credit Card Loan?

With skyrocketing gold prices, if you have invested in gold, you can easily pledge that and avail of a reasonable loan amount to tide over a temporary cash crunch. The past few decades have seen only a steep rise in gold prices and never otherwise. Hence you can avail of gold loans from Muthoot Fincorp and even use our top-up facility to further cater to your emergency cash needs. Unsecured loans like personal loans and credit cards entail colossal interest rates that can further stress your finances, especially when cash is strapped. Let’s compare each feature of credit card loans and gold loans to know in detail which is the best for you.

Collateral

Gold loans are secured loans, and hence they offer lower interest rates than loans that do not involve any collateral. Credit card loans are unsecured and come at high loan interest rates up to 24% per annum, while gold loans start at 6.9% per annum. Additionally, the processing fees for gold loan is also very low, as Rs 12 to 0.25% of the loan amount is availed at Muthoot Fincorp.

Credit History

Credit history is essential for credit card loans, while it isn’t critical for gold loans as they are secured loans. So, if your credit history is lower, you can still take a gold loan and repay it on time to increase your credit scores. Additionally, unlike credit cards and personal loans, gold loans do not check credit scores to offer you the best deals in the market. You can still get lower interest rates and higher funds with your security pledged.

Quicker Loan Approval and Fund Disbursal

Credit cards are quicker, but gold loans are even faster regarding approval and disbursal. Availing of gold loan is good and hassle-free as well. You can walk into the nearest Muthoot branch and avail of the loan within a few minutes.

Loan Amount

With credit cards, you cannot exceed your credit limit. Additionally, exhausting your credit card limit will take a hit on your credit score. Meanwhile, you can avail up to 75% of the gold value pledged as a loan amount instantly with gold loans. You can even take a top-up loan on your existing gold loan if you haven’t utilized the full value of the gold asset pledged. You can easily calculate the maximum amount of gold loan you can get according to the weight of the gold loan and the interest rate of the gold loan in the comfort of your home using a gold loan calculator.

With this free self-help tool, you need to input the required loan amount and residential state. Once you submit the details, the page will display the interest rate and tenure accordingly. You can choose a combination that you can repay quickly and plan your loan before availing it. We have more than 3600 branches across India for your convenience. You can select the scheme of your choice by going to the nearest Muthoot branch near you.

Also, Read- How Gold Loan Is Considered A Smarter Choice To Complete Your Education?

Flexible Repayment

Unlike credit card repayment, gold loan repayment is flexible. The borrower can choose from several options for repayment, which are not offered in any other type of loan. Let’s know what they are:

• Repayment through flexible installments.
• Repayment of only interest rate during the loan tenure and payment of the rest of the amount at the end of the tenure
• Repaying the total loan amount and interest rate together at the end of the tenure.

Gold Loan Vs Credit Card Loans in a Nutshell: