Banks and other financial institutions are the most popular resources to get loans by collateralizing assets. These loans are the sum of money provided by the financial institutions that are expected to be paid back with a certain amount of interest.
Loans are generally of multiple types that when avail can address any situation dwelling in crisis. However, in this blog, we are more concerned about the gold loan and personal loan.
What is a personal loan?
A personal loan is basically an unsecured loan that when availed from any financial institution meet all your current financial needs. In this type of loan, you don't actually need to ensure any security or collateral, what you say in technical terms. You get the flexibility to use the funds as per your need.
However, in contrast to this, the gold loan has a bit different concept.
What is gold loan?
A gold loan is a secured loan taken against gold from any jewelry pawn shop. Unlike the personal loan, here a customer pledges his gold or other precious timeless treasure as collateral with a gold loan company. Surprisingly, this is one of the most convenient and easiest ways to opt for loans.
People often tangle between these two options – Gold loan or Personal loan? Some say gold loans are more effective than the personal loan. While some find the opposite one more friendly. Let us dig out the reasons why the gold loan should be the best option over the personal loan.
1. Higher Principal Amount: In case you are applying for a personal loan, your loan would be sanctioned once your monthly salary gets paired with their requirements. The broker will ask for your payslip first before sanctioning your loan.
While in the gold loan, the picture is completely different. Here the amount can reach 75% of the collateral. Hence, with gold loans, you can take any amount of loan, irrespective of what is your salary.
2. Easy Disbursement: As it has been declared earlier, a personal loan does not give you any security promise. This type of loan is completely based on the risk and the loan doesn't get credited unless the borrower is satisfied to take the risk and the lender has gone through the finances of the loan. Such a long process is quite time-consuming.
In gold loan, the process is not so lengthy. The pawner just has to hand over the gold and wait till the jewelry pawnbroker in Chicago examines the jewelry and pass the approval. Some formalities and your loan are sanctioned.
3. No Processing Fee: Personal loans go through several processes of checking. The moment you submit all your documents, it will be scrutinized by the officers. All your financial standing and income proof will be thoroughly examined. And later a processing fee will be charged against your loan.
However, gold loans require no processing fee as there is no prerequisite of any income proof.
4. Lower Interest Rates: Interest rates for a personal loan as per the market is really high. The borrower may get a long period to pay off the loan but the interest rates sometimes create a huge burden.
In contrast to this, gold interest rates are low and you get a very least amount of time to pay off the loan.
Although the personal loan is one of the most popular and preferable loan options when it comes to meet any financial need, gold loan, based on the above-mentioned reasons, is the best alternative that can serve you instantly.
So, if anyone interested to pawn their gold jewelry pieces, can simply move on to a jewelry pawn shop and get a satisfying amount of money based on the market value.
There are several jewelry pawnbrokers in Chicago that have gained their reputation by serving the best and fairest amount of loans.
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