The process of getting funds through pledging your gold ornament, pieces or coins at any bank or NBFC (Non-Banking Financial Companies) is known as a gold loan. The funds you get from a Gold Loan can be used for various purposes: debt consolidation, vacation, wedding or miscellaneous expenses. The borrower has to repay the loan amount through instalments within the loan tenure, along with the interest rate. Therefore, if the borrower misses even a single instalment, it will negatively affect the credit score and be charged a late payment fee and if the borrower is unable to repay the loan amount, then the bank will seize their gold ornament and sell it at an auction to recover the loan amount. However, the bank will give multiple notices before making any decision regarding the auction. A lot of banks will allow you to get your gold back by giving you a seat at an auction. So if you are unable to repay the loan amount until the auction, then you'll get the chance to get your gold back during the auction. 

Banks will only approve your application if you are eligible. So you'll have to meet the bank's eligibility criteria to get your loan application approved. The eligibility criteria usually differ from one bank to another. So to compare all the banks and choose a bank that meets your criteria perfectly. 




  1. Flexibility:- Banks give customers the flexibility to use the money they get from this loan however they want. So there is no restriction on the usage of funds. The funds can be used for various purposes at the same time.

  2. Documentation:- The application process for a gold loan is speedy and hassle-free. So you don't have to worry much about the application process. You have to submit some basic KYC documents along with the application form.

  3. Credit Score:- You don't necessarily have to maintain a decent credit score to get the facility of a gold loan. You can even use a gold loan as an opportunity to increase your credit score if you have a low credit score.




A personal loan is an unsecured loan that can be availed at any bank or NBFCs. You can use the funds that you get through a personal loan for various purposes. Banks don't monitor the usage of funds that have been given through personal loans. Therefore, customers have the complete flexibility to use the fund however they want, but they cannot use it for any illegal practices. The eligibility criteria play a very important role in determining your application approval. There are many factors involved in determining eligibility criteria, and credit score are one of them. You can quickly get your loan application approved and disbursed if you have a decent credit score. But if you have an insufficient credit score, then many banks will reject your application. So it's essential to maintain a decent credit score to get funds through a personal loan. Banks like Future Capital Gold Loan offer gold loans starting at just 7% per annum with a very user-friendly application process.




  1. Flexibility:- The only thing that makes gold loans and personal loans similar is that banks don't monitor the funds given. So you can use the funds for various purposes at the same time.

  2. Down payment:- You don't necessarily have to make a down payment to get funds from a personal loan. It is entirely up to the customer. 

  3. Documentation:- The application process for a personal loan is straightforward and quick. It can be processed in 2-7 business days. The approval time is comparatively lesser than other loans.
    Personal loans and gold loans have different advantages and benefits. You can compare all the variables and check which loan option is the best for you according to your requirements.