Which Should You Choose Between a Gold Loan and a Loan Against Property?

  • By Ruptok
  • January 27th, 2022

When faced with a financial emergency, many people turn to personal loans for help. These loans are specifically designed to help you get through a financial emergency. Its high interest rate, on the other hand, makes it rather taxing on the wallet. What if you're not eligible for a personal loan at all? What if you require a loan amount that is significantly greater than what you are qualified for under a personal loan? In such a case, you may consider leveraging your accumulated funds to help you get out of your financial bind. However, liquidating assets like mutual funds and fixed deposits may not always be a viable decision.

So, what are your options for getting out of this situation? You might find the solutions you're seeking for in a gold loan or a loan against property (LAP). You've come to the right site if you're wondering which of the two will be more advantageous in your case. We've put the two secured loans against each other in this post so you can see which one will work best for you in times of financial emergency.

6 Reasons Why a Gold Loan Is Beneficial Than a Personal Loan


Secured loans are secured by an asset or security that serves as collateral and is held by lenders until the loan amount (including interest and other fees) is fully paid off. If you are unable to repay the loan for any reason, your lender will retrieve the outstanding loan amount using the pledged collateral.

Because both the loan against property and the gold loan are secured loans, you must pledge an asset as security to the lender. You must promise gold objects in the form of jewellery and coins to qualify for a gold loan. LAP, on the other hand, requires you to mortgage your business or residential property.

Interest Rates

For all potential borrowers, the rate of interest is the most important factor to consider. The interest rates on gold loans are fixed, whereas the interest rates on loan against property are both fluctuating and fixed. Interest rates on gold loans range from 9.24 percent to 26 percent, while fixed interest rates on loans secured by real estate typically range from 9.6 percent to 11.5 percent.

Criteria for Eligibility

To obtain a loan, you must first be eligible. In the case of gold loans, lenders are less concerned with the applicant's occupation, credit score, and other factors. This, in turn, benefits all potential borrowers, especially those who find themselves in a financial emergency, as it raises their chances of getting their loan applications granted. Most lenders will give a gold loan to anyone aged 18 to 75 as long as the gold jewellery they promise meets the lender's conditions.

The eligibility standards for LAP, on the other hand, are more severe than those for gold loans. It varies significantly from one lender to the next, but age, income, property worth, previous liabilities (if any), business stability or continuity, and credit history are all factors that all lenders assess before granting a loan application.

Loan Processing Time

Gold loans are quick and simple to obtain, making them a perfect financial choice for those who require cash quickly. The documentation is low due to the lenient eligibility criteria, which speeds up the loan process. You can acquire a gold loan approval in as little as a few hours, nearly instantaneously.

On the other hand, the time it takes to process an LAP loan is longer than it takes to handle a gold loan. Lenders must check all property-related documentation, which takes time. Furthermore, if the property in question has many owners, each will be required to file a NOC (No Objection Certification) in order to obtain the loan, thus lengthening the processing time.

Fee processing

Lenders demand a fee called a processing fee to process any loan. Lenders could charge a processing fee of up to 2% of the loan amount for gold loans. Some lenders, such as Ruptok do not charge any fees for the loan processing. Lenders impose a processing fee of up to 2% of the loan amount for LAP, which varies based on the regulations and terms and conditions of each lender.

Repayment Tenure

The repayment term is the amount of time you have to repay the lender for the money you borrowed. The EMIs will be less as the loan payback time lengthens, making it easier for you to repay the borrowed funds. However, choosing a longer payback period will result in a greater overall interest payment.

A one-year gold loan can be repaid. LAP payback periods, on the other hand, might be as long as 20 years. The EMIs on a gold loan will be expensive due to the short repayment term. As a result, persons who require a small sum of money should choose this loan. LAP will be a better alternative for a large loan sum. Because of the long payback term, your EMIs will be shorter, making it easier to repay the borrowed funds.


The documentation for a gold loan is straightforward, and the application process does not necessitate a stack of papers. A signed loan application form, two passport-size pictures, and a copy of evidence of identity and domicile are required of potential borrowers. The list of documentation required when applying for a loan with LAP is a little longer. A signed loan application form, evidence of identity, proof of income, and proof of domicile are all required.


Whether a gold loan or a loan against property is better for you is determined by your needs. Gold is a commodity that most people own. It is extremely liquid and has a high market value. Because a gold loan has a short repayment time, it is best for a small loan amount. Because LAP has a low interest rate and a long repayment period, it is ideal for borrowing a significant sum of money. When you have a financial emergency, a gold loan should be your first choice because it has fewer eligibility requirements, requires less documents, and takes less time to process.