Introduction to Gold Loans and Personal Loans
In 2025, choosing between gold loans and personal loans depends on your financial needs. Loanpao breaks down their differences, helping you decide which suits you best.
Gold Loans vs Personal Loans: Key Differences
Compare the two loan types based on critical factors:
| Feature | Gold Loan | Personal Loan |
|---|---|---|
| Collateral | Requires gold jewellery as security | Unsecured, no collateral needed |
| Interest Rate | 8–12% p.a. | 10–24% p.a. |
| Loan Amount | Up to 75% of gold value (₹1,000–₹50 lakh) | ₹50,000–₹40 lakh |
| Disbursal Time | Within hours | 1–7 days |
| Tenure | 3 months–3 years | 1–7 years |
| Credit Score | Minimal impact | High credit score required |
| Purpose | Any purpose, secured by gold | Flexible, no end-use restriction |
Note: Rates and terms vary by lender and applicant profile.
Benefits of Gold Loans
Gold loans offer:
- Lower interest rates (8–12% p.a.) due to collateral.
- Quick disbursal, often within hours.
- Minimal credit score requirements.
- Flexible use for personal or business needs.
Benefits of Personal Loans
Personal loans provide:
- No collateral, reducing asset risk.
- Longer repayment tenures (up to 7 years).
- Quick approval for high credit score holders.
- Versatile for emergencies, travel, or debt consolidation.
Which Loan Should You Choose?
Consider these factors:
- Urgency: Choose gold loans for fast disbursal.
- Collateral: Opt for personal loans if you lack gold or prefer no asset risk.
- Cost: Gold loans are cheaper; personal loans have higher rates.
- Credit Profile: Gold loans suit low credit scores; personal loans need strong credit.
- Repayment: Personal loans offer longer tenures for easier EMIs.
Use Loanpao’s EMI calculator to compare repayment plans.
Frequently Asked Questions
Gold loans require gold as collateral and have lower rates, while personal loans are unsecured with higher rates.
Gold loans disburse within hours, while personal loans take 1–7 days.
Gold loans have minimal credit score requirements due to collateral.
Yes, personal loans have no end-use restrictions, unlike some gold loans.
Loanpao offers EMI calculators, eligibility checkers, and lender comparisons.