Loan Against Gold

Gold loan interest rates are lower as compared to personal loans and this is probably the edge. Most of the banks and institutions do not charge processing fees. However, they are charged for valuation of gold.

Only a few documents such as ID and Address proof and PAN card are required to avail gold loan. Unlike personal loan where credit history is given utmost priority.

Overdraft facility

Individuals who have made a fixed deposit can avail loan on the same. In which case lien is marked on the fixed deposit until the amount is repaid. One can avail up to 80 per cent of the amount on the total deposit made.

Loan against Insurance policies

If one is eligible they can avail loan on their LIC polices. The minimum tenure to avail loan is a minimum of 3 yearly premiums. Only after that, you can avail for a loan which would be around 90% of Surrender Value.

Loan against Property

One can avail loan against property, but, lien will be marked on the property until full loan amount including interest is paid. What this means is that the owner cannot sell the property unless the loan is closed. As building or land will act as collateral until the loan is paid.

Loan against shares/mutual funds

One can pledge their shares instead of selling them when in need of cash. The loan is provided only against multiple scrips as it will act as a hedge for the bank in case price of a particular scrip falls sharply.

Loan against provident fund

This loan can be availed against the balance in your PPF account. One can avail a loan from your PPF account from the 3rd year of opening your account to the 6th year. There are certain conditions and loan can be availed for a specific purpose as suggested by the department.

Conclusion

Personal loan can be availed when an individuals is in need of cash and has no collateral such as property, shares, fixed deposit or gold.

Click to read advantages and disadvantages of personal loan.