Sudden need for money? Gold loan, personal loan or credit card, learn what is the best for you

Nobody knows when, where and how money suddenly needs in life. Sometimes a medical emergency, sometimes the cost of children’s education, sometimes a sudden responsibility came to the house. This is the first question in our mind at such a time – “Where will the money come from?”

In response, we often have three routes: a loan (gold loan) on the gold placed in the house, a loan (personal loan) on our salary, or a credit card. All three give you money, but the conditions of all three, interest rates and methods of repaying are completely different.

If you have chosen a wrong option without thinking, then you can get caught in a big debt trap. So let’s solve this confusion today and understand which loan will be the most sensible decision according to your need.

1. Gold loan (loan in exchange for gold) – the cheapest and trusted companion

This is the oldest and straightforward way. The gold (jewelry, coins etc.) kept in your house, you mortgage it to the bank or a finance company and take a loan in lieu of its value.

• Benefits:
  • The lowest interest rate:Because you have kept your precious thing (gold) as a guarantee, the risk of the bank decreases and it takes the lowest interest among these three.
  • Get immediately:There is not much paperwork in it. As soon as gold is checked, money comes to your account in a few hours.
  • Not worried about credit score:Even if your CIBIL score is bad, this loan is easily found.
• Loss:
  • You must have gold.
  • If you have not paid the loan on time, you can lose your gold.
• For whom is it best?
  If you have gold and you need money quickly, then this is the best, cheapest and easiest option.

2. Personal Loan – When there is no mortgage

This is a ‘unsecured’ loan, that is, you do not need to pledge anything for this. The bank gives you a loan by looking at your job, your every month’s earnings (salary) and your previous record (credit score).

• Benefits:
  • Nothing has to be pledged.
  • You can use this money for any work.
• Loss:
  • Very high interest rate:Its interest may be almost double the interest than the gold loan, as the bank’s risk is higher.
  • Good credit score required:If your CIBIL score is less than 750, it is very difficult to get a loan.
  • Paper proceedings more:It takes many documents like salary slip, bank statement and it may take 2-3 days to get money.
• For whom is it best?
  This is good for those who have 固定 salary, the credit score is very good and they have nothing to mortgage.

3. Lone on credit card – fastest, the most dangerous net

This is the easiest and fastest way to get money, but this is also the most dangerous. You can either withdraw cash from your credit card or take a loan in exchange for your card limit.

• Benefits:
  • Money is available in a minute immediately.
  • No paperwork.
• Loss:
  • Sparrows of interest:Its interest rate is the highest in these three (about 35–45% annually). If you are not able to repay on time, then this debt increases like a demon.
  • Slixs in debt trap:Due to getting easily, people use it for small things and then get caught in a web of heavy interest.
• For whom is it best?
  This is only and only very small amounts (5-10 thousand) and your last option for emergency of very short time (a few days) There should be no other way left.

What is the final decision?

Therefore, the next time the money is needed, then think once with a cold mind before pressing any button in a hurry. If you want to sleep at home, then he will prove to be your most true friend.