Let us briefly take a look at each factor and how to varies from both gold loans and personal loans and what kind of benefits the gold loan provides over the unsecured type of personal loans.


Well, when we first take in ten factors related to the processing time to avail the gold loan personal loan, the time varies in both. The processing time of a gold loan tends to be pretty quick and fast whereas the processing time of personal loan is longer and slow in comparison. The banks like ICICI gold loan, give in their word that the processing time in their bank is just 45mins of time. So from this, the processing time associated with a gold loan is just a matter of a few minutes to certain hours.
While when we look at the processing time involved in getting a borrower his or her personal loan, it may almost take about 5-7 days of time which is upto a week’s time in general. So this way gold loans are sanctioned quicker and faster than personal loans.


Nowadays, for every process certain documents to be submitted as proof and trust are made mandatory. Keeping that point in my, it applies similarly for both gold loans and personal loans as well. The documentation requested and required by the lending institutions for gold loans and personal loans may vary. And if we talk about the case of gold loan to be availed by the borrower, he or she is considered lucky because they just require to submit very minimal amount of documents, which basically consists of very general ones, that is basic government ID proofs, which are nothing but Aadhar card, PAN card, Driving license etc and any among these are accepted. While in the case of personal loan to be considered, the documentation is on a higher level, which deals with income tax return etc. So the general crowd of people choose gold loans over personal loans when documents are considered.


To take in account of the processing fee, this is one of the primary key factors to the borrowers as it may also help them eventually to calculate and make a note of the actual cost of availing for the loan they are going to get. So which means, the less the processing fee, the better preference on choosing either gold loan or personal loan. The processing fee, which banks make is very low, which ranges from just ₹10 onwards and few others at the most may charge upto 2%. But when we consider the processing fee associated with personal loans, it may go upto 3% which is a lot more in comparison to the gold loans and that is the why borrower have their preferences on gold loans more.


If we talk in general terms, the gold loan offers interest rates starting from 7.25% to 29% while the personal loan offers a range from 8.45% to 26%. It is important for every borrower to maintain and see to it that he or she has a good and high credit score, because the interest rate being offered takes in consideration of the credit score as well. But overall gold loan is the one to be considered on offering satisfactory interest rates.


Repayment is one of the major points for every borrower in order to fulfill their payments accordingly and eventually to maintain a good credit score. Therefore banks usually make sure to offer a wide number of repayment options and eventually a borrower can choose whichever he or she feels convenient. In this case, gold loans offer a variety of repayment options for their borrowers while the personal loans just put forward an EMI scheme of payment. Therefore even in this case gold loans are preferred by more number of customers.

Author's Bio: 

Gaurav S. Khurana is the Founder and CEO of Dialabank and has had a great career in the Banking and Financial Services Sector. He has an experience of 18 years in the sector and has worked at Senior Roles including National Sales Head at ING Investment Management India and as the Vice President Citibank. A post-graduate from IMT, Ghaziabad. Gaurav started his career as a Named Account Manager in Xerox.

Being a part of this field for a long time now, he has written many informative articles and blogs benefiting and assisting many in making decisions regarding the policies provided by various banks and non-banking financial companies such as the ICICI Gold Loan policy.