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Loan Against Property VS Gold Loan – Which One To Choose?

Loan against property vs gold loan which one to choose?

During financial need, securing a loan can be one of the best decisions to meet cash requirements. Two popular options often considered are Gold Loans and Loans Against Property. Both of them have benefits, so it is vital for one to choose according to their preferences.

Gold Loan

A Gold Loan is a guaranteed loan where you pledge your gold jewellery, coins, or ornaments as collateral to obtain funds from a financial institution.

Quick Disbursal

One of the vital advantages of a Gold Loan is the quick processing and disbursal of funds. Since the loan is backed by collateral, lenders are generally less stringent with eligibility criteria, resulting in faster approvals and immediate access to funds.

No Credit Check

Gold Loan does not go through a credit check process, making it an option for individuals with a poor credit history or those who have not built a credit score.


Gold Loans have a short tenure, depending on the lender. This short-term nature can be an advantage , depending on the borrower's financial goals.

Interest Rates

The interest rates for Gold Loans are often higher compared to other secured loans like Home Loans or Loan Against Property. Additionally, the interest rates are lower, making it an affordable option for those in need of immediate funds.

Loan Against Property (LAP)

A Loan Against Property is a secured loan where you lease your residential or commercial property to avail funds from a bank or financial institution. The loan amount is calculated according to the property's value.

Long Tenure

One of the most important advantages of Loans Against Property is that it offers a longer tenure. Borrowers can choose a repayment term, allowing them to pay off the loan without inflating their monthly budget.

Low interest rates

Loan Against Property generally comes with lower interest rates as compared to Gold Loans. As the loan is guaranteed by assets, lenders see it as a secure transaction, offering higher interest rates.

Property valuation

Asset assessment is important in this type of loan. The amount of loan you can get is finalized according to the property value, and different lenders have different criteria for valuing a property that can affect the final loan amount you can get.

Which one should they choose?

A gold loan is a loan against property decision that is ultimately based on your personal needs, ability to pay and risk appetite.


In conclusion, both gold loans and loan against property are viable options for individuals seeking financial assistance. At the same time, gold loans provide faster funding with minimal paperwork, and loan against property provide higher loans with lower interest rates and longer terms Always examine financing expert advice as necessary to ensure you make the right decision for your unique circumstances.

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