Synopsis: Should you pick a Personal Loan or a Gold Loan? This guide compares
eligibility, cost, speed, flexibility and latest bank interest-rate ranges across leading public and private banks
(SBI, HDFC Bank, ICICI Bank, Axis Bank) to help you decide. We also add RBI’s 75% LTV guardrail for gold loans, and a quick
EMI example so you can see the difference in monthly outgo.
Personal loans are unsecured and depend heavily on your credit profile—making them flexible but often pricier.
Gold loans are secured against your gold, disburse fast and are usually cheaper, but your jewellery stays pledged and
the loan amount is capped by the RBI’s Loan-to-Value (LTV) ceiling of 75%.
At a Glance: Personal Loan vs Gold Loan
| Feature | Personal Loan | Gold Loan |
|---|---|---|
| Security | Unsecured (no collateral) | Secured by pledged gold (jewellery/coins as per lender policy) |
| Typical Rate Range* | ~9.9%–24% p.a. (bank & profile dependent) | ~9.15%–17.9% p.a. (bank & product dependent) |
| How much can you borrow? | Based on income, credit score, employer, existing EMIs | Capped by gold value & RBI LTV ≤ 75% |
| Speed & paperwork | Quick if you’re pre-approved; otherwise KYC/income checks | Usually very fast (in-branch gold valuation + KYC) |
| Risks | Higher rates if credit is weak; heavy fees possible | Risk of auction if you default; price-volatility top-ups possible |
*Illustrative public ranges; actual offers vary by borrower profile, scheme, tenure, and internal pricing.
Bank Interest-Rate Snapshots (Personal Loans)
| Bank | Indicative Personal Loan Rate Range |
|---|---|
| SBI (Public) | ~10.05%–15.30% p.a. |
| HDFC Bank (Private) | ~9.99%–24% p.a. |
| ICICI Bank (Private) | ~10.60%–10.85%+ p.a. |
| Axis Bank (Private) | ~9.90%–22%+ p.a. |
Bank Interest-Rate Snapshots (Gold Loans)
| Bank | Indicative Gold Loan Rate Range |
|---|---|
| SBI (Public) | ~8.75%–11.25%+ p.a. |
| HDFC Bank (Private) | ~9.30%–17.88% p.a. |
| ICICI Bank (Private) | ~9.15%–18% p.a. |
| Axis Bank (Private) | ~9.75%–17% p.a. |
When to Choose Which?
- Pick a Gold Loan if you want lower rates, faster disbursal, and flexible repayment, and you’re comfortable pledging jewellery.
- Pick a Personal Loan if you don’t want to pledge assets, need longer tenures (up to 5–6 years) and have a strong credit profile to get competitive rates.
EMI Example (Illustrative)
Loan of ₹3,00,000 for 24 months:
- Gold Loan @ 11% p.a.: EMI ≈ ₹13,961/month; interest ≈ ₹35,064 total.
- Personal Loan @ 15% p.a.: EMI ≈ ₹14,545/month; interest ≈ ₹49,091 total.
Fine Print that Matters
- RBI LTV cap @ 75% on gold loans: if gold prices fall, lenders may ask for top-up or part-payment to maintain LTV.
- Charges: processing, valuation (for gold), prepayment/foreclosure and penal charges differ by bank—always check tariff sheets.
✅ Verdict
For short-term & low-cost borrowing, a Gold Loan usually wins (if you can pledge jewellery and repay quickly).
For larger tickets/longer tenures without collateral, a Personal Loan is better—especially if your credit score
helps you secure rates under ~12%.
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