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Gold Loan vs Personal Loan

Gold loans are secured (your gold is collateral) → cheaper, faster disbursal, lower CIBIL impact. Personal loans are unsecured → higher rate but you keep your gold. For short tenures, gold loans usually win.

₹5,00,000
24 mo
10.0%
13.0%

Gold Loan

EMI ₹23,072

Interest: ₹53,739

Personal Loan

EMI ₹23,771

Interest: ₹70,502

Gold loan saves ₹16,763 in total interest over 24 months.

How the two options compare

Gold loans are secured by 22-karat physical gold — banks lend up to 75% of gold value (RBI LTV cap). Disbursal is in 30 minutes against jewellery valuation, no income proof, no CIBIL check. Personal loans are unsecured — banks check CIBIL (725+), income (salary slips), and price the rate accordingly. Rate differential of 3-5% adds up fast.

Worked example

You need ₹5 lakh for 24 months for a medical emergency. Gold loan at 9% → EMI ₹22,841, total interest ₹48,184. Personal loan at 14% → EMI ₹24,006, total interest ₹76,144. Gold loan saves ₹27,960. If you have ~85 g of 22K gold (current market price ₹6,500/g = ₹5.5 lakh), pledging it makes sense — you keep ownership and reclaim it after repayment.

When to use each

  • Gold loan — short tenure (6–24 months), no income proof, low CIBIL, emergency funds
  • Personal loan — longer tenure (36–60 months), no gold to pledge, want flexible repayment
  • Combination — gold loan for the lower interest, top up with a small personal loan for the gap

Always check the gold loan's processing fee (0.5–2%) and renewal/foreclosure terms. For other secured options, see the loan against property calculator.

FAQ

What if my gold loan rate jumps to 14%?

Then personal loan often wins. Check both at decision time. NBFC gold loans (Manappuram, Muthoot) are typically 10-12%; bank gold loans 8-10%.

Can my gold be auctioned?

Yes — if you default. RBI rules require lender to give 14-day notice + hold public auction. Repayment plus penalty restores possession.

Gold loan tenure max?

Typically 12 months for bullet; up to 24-36 months for EMI. Banks: longer tenures. NBFC: shorter, faster disbursal.