All You Need to Know About Gold Loan Vs Plot Loan

While some loans are quite common, like a gold loan or home loan, there are a few that are less known, such as plot loans. Did you know there are separate loans that can be taking for buying plots of land? So, here’s a look at both online gold loans and plot loans and the important difference between these two. 

What is a Gold Loan?

A gold loan, available online and offline, is a secured loan that banks offer against gold jewellery. The gold jewellery is kept as collateral, and the loan amount is given to the applicant. The loan amount depends on the current gold prices. The gold is kept in a highly secured vault of the banksand you can get it back after repaying the loan. Gold loans are available only against gold jewellery and not gold coins or bars. 

Gold loans are among the most easily available loans as they are secured loans and the value of gold does not fluctuate widely. These loans are great saviours in times of distress and come in handy during medical emergencies. However, you can apply for a gold loan online for any purpose – business expansion, paying salaries and wages to employees, going on a vacation, child’s higher education or wedding,or any other purpose, for which you have a shortage of funds. 

What is a Plot Loan?

Plot loans, on the other hand, are similar to home loans where you take a loan for buying a vacant plot. If you wish to buy a plot now and construct a house later, you can apply for a plot loan. This is one of the loans that most people do not know about. The advantage is that you can buy the plot even if you don’t have money to construct your home here. You can wait for the price of the plot to appreciate and use this as collateral when you need funds to construct your home. A plot is a great investment and acts as a financial safety net during emergencies. 

Nature of the Loans – Gold vs. Plot Loans

Both gold and plot loans are secured loans.However, while gold loans are offered against the gold you already own, plot loans are meant for purchasing a plot of land. Although the plot remains pledged until the loan is repaid, you can use the plot. 

Eligibility for Gold Loan vs. Plot Loan

• For gold loan online, you need to be at least 21 years old.For a plot loan, you have to be at least 23 years old. 
• Gold loans are only available for resident Indians, while plot loans can be availed by both resident and non-resident Indians.
• You need to apply as an individual for a gold loan, while you can add co-applicants when applying for a plot loan, to increase the chances of getting the loan. 

Benefits of Gold Loan vs. Plot Loan

• The interest rate on gold loans usually doesn’t fluctuate much like other loans which include plot loans too. 
• You can get a plot loan for different types of plots such as new plot purchase, purchase of resale plot, for construction of a house or other property. On the other hand, gold loans are available only for gold jewellery and no other form of gold. 

Ease of Loan Application and Processing

With online gold loan facilities, you can get gold loans within a few hours of your application and even the process to apply is quite simple. On the other hand, you can apply for plot loans online, it may take a bit more time as the plot will be evaluated before the bank approves and disburses the loan. 

Both gold loans and plot loans have their own set of benefits. While gold loans can come in handy during contingencies, plot loans can be great for building your dream house in the future.