When stuck with a financial dilemma we often consider applying for a personal loan. But high-interest rate on a personal loan can add on to your financial woes instead of reducing them. Opting for gold loan or loan against property may prove to be affordable and useful remedies in such situations. Let’s take a quick look into the features of gold loan and LAP to understand which can work better for you during financial emergencies:
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If you are stuck by a financial emergency and need affordable credit, then you can apply for a loan against property. In this type of loan, you can access the fund by providing a commercial or a residential property as collateral. The amount of loan you can get depends on the market value of your property.
See Also: Advantages of Gold Loan
Some of the features of the LAP are as follows:
See Also: Need for a Gold Loan
Gold is one of the most traditional forms of investment in India. Most of the families prefer to keep some quantum of physical gold in their possession and thus gold loan is not a new concept. Previously, people pawned gold with private moneylenders in return of high-interest loans. With the introduction of the gold loan in the organized sector, people can avail of quick and affordable loans by mortgaging physical gold.
Given below are some of the key features of gold loan:
See Also: What Is A Gold Loan?
We cannot compare both the loan side by side and get a clear winner as the benefits of both depends on the circumstances of the borrower. For example, if there is a medical emergency and you want to avail funds quickly then a gold loan is beneficial for you. It requires minimal documentation and has a lenient eligibility criterion. But if you want to avail a higher quantum of funds at an affordable interest rate for funding your business or home renovation then loan against property can be a good option for you.
You must also consider other aspects like your repayment capacity while availing such loans. Gold loan can be your go-to option for smaller loans as they have smaller repayment periods. However, if you are seeking credit with longer repayment tenure then LAP is what you should opt for.
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