Gold Loan Vs Personal Loan
18 Jul 2025

Gold Loan vs Personal Loan - Which is Better?

Key Takeaways

  • Gold Loans are secured loans wherein you can get funds against your gold ornaments as collateral.
  • Personal Loans are unsecured, collateral-free loans.
  • Lenders approve Personal Loans based on your credit score and monthly income.
  • You can get loan amount basis gold’s current market value as per RBI guidelines.

When you need funds quickly, the right loan depends on your need. A Personal Loan suits longer-term expenses like medical bills or education, especially if you have a steady income. A Gold Loan is ideal for short-term needs like travel, business costs, or emergencies. Knowing when to use each can help you choose between a gold loan vs personal loan.

Personal Loan Vs Gold Loan – The Definitions

You can secure the funds you need by taking a gold loan against your gold ornaments like bangles, necklaces, earrings etc. as collateral. The lender considers the weight of the gold to determine the loan amount. The lender returns your collateral once you repay the loan. You can simply visit your nearest DBS Bank branch and avail Gold loan.

A Personal Loan is a unsecured loan wherein you do not need to provide collateral. Lenders typically consider your income, employment status, and credit score to assess your eligibility. Today, most lenders provide Instant Personal Loans, for which you can apply online.

Choosing Between Gold Loan Vs Personal Loan

Consider these features to assess the better option between Personal Loan Vs Gold Loan.

Feature

Gold Loan

Personal Loan

Loan Amount

Basis gold’s current market value as per RBI guidelines

You can get a personal loan of up to ₹15 lakh without any collaterals

Repayment

Flexible repayment:

  1. Monthly Interest repayment facility, under which interest is payable monthly and principal at the end of loan tenure.
  2. Bullet repayment facility, under which interest and principal is payable at the end of the loan tenure.
  3. EMI (Equated Monthly Instalments) / EQI (Equated Quarterly Instalments) repayment option, under which, borrower will repay the principal/loan together with the interest calculated on the reducing principal balance as per repayment schedule.

Repaid in EMIs including both principal and interest

Loan Tenure

Up to 3 years

Usually up to 5 years

Interest Rate & Security

Lower interest rate; gold acts as collateral, reducing lender’s risk

Slightly higher interest rate; unsecured loan with no collateral

Consider these features to assess the better option between Personal Loan Vs Gold Loan.

Online Tools and Support

Lenders now offer online tools such as a gold loan interest calculator to help you estimate amount. These tools provide clarity on how much you’ll owe based on the gold loan interest rate and tenure. Personal loan EMI calculators work similarly, helping you plan your monthly outflow.

Which is Better? Gold Loan or Personal Loan

Both Gold Loans and Personal Loans are excellent as they help you finance your various expenses. The better option for you depends on the loan amount, whether you need a longer repayment tenure or are comfortable with mortgaging your gold. Today you can even consider Instant Personal Loans, through which you can get fund disbursals within hours.

Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page.