Which is cheaper gold loan or personal loan?

When deciding between a gold loan and a personal loan, the overall cost is a key consideration for most borrowers. Gold loans are typically more affordable than personal loans, mainly because they are secured by your gold ornaments or coins. Since the lender holds your gold as collateral, the risk is lower for them, which translates into more attractive interest rates for you. In many cases, gold loan interest rates can start from around 7% to 12% per annum, depending on the lender and the quality of your gold.

Personal loans, on the other hand, are unsecured. This means you don’t need to pledge any asset, but the lender takes on more risk. As a result, interest rates for personal loans are usually higher, often ranging from 10% to 24% per annum. Processing fees and other charges also tend to be lower for gold loans, and the approval process is generally quicker, with minimal paperwork and funds often disbursed on the same day.

The total cost of either loan will depend on several factors, such as the interest rate offered to you, the tenure you choose, and any additional fees. Gold loans are usually better suited for short-term needs, while personal loans might be more appropriate for larger amounts or longer repayment periods. It’s always wise to compare both options carefully, considering your financial needs and repayment capacity before making a decision.