Loan Against Gold vs Loan Against Property: Which Is Right For You?
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Loan Against Gold vs Loan Against Property: Which Is Right For You?

Gold Loan Vs Property Loan

Financial emergencies can occur at any time, and a loan can be the best option to come over it. But do you know? Taking a loan can be a stressful process and may take up to weeks or a month to get approved. Sometimes, like health emergencies or hospitalization, require immediate address.

But what if I, say, you can get a quick loan for any emergency? There are loans for which you have to pledge either your property or gold to get the funds.

In times of unexpected financial strain, the choice between a loan against gold and a loan against property can make a significant difference. Let’s consider a real-life scenario to illustrate this further.

Rohit, who was working in a top IT company, lost his job due to a mass layoff at his organization. This couldn’t have come at a worse time as his sister’s wedding was scheduled for next month. It was a huge blow for him as he had already drained out his savings toward the wedding expenses. He contacted his known ones for some funds but to no avail. Moreover, his credit score was on the lower side and it prevented him from taking personal loans.

Just when things looked all gloomy he got to know about secured loans i.e., he can take a loan after pledging any asset be it gold or property. Rohit had some idle gold lying with him and he opted for a gold loan and successfully completed his sister’s marriage with much fanfare. Gold loans and loans against property are two of the easiest and most convenient ways to tide over the immediate financial crisis. This blog will assist you in understanding the difference between a gold loan and a loan against property thereby helping you make a wise decision of which loan is best for you. 

Did you know?

 The Indian households hold an astonishing 21,000 tonnes of gold which is even higher than the total world gold reserves. At the end of 2022-23, the Indian gold loan market is valued at $55 billion and is expected to rise to $150 billion by 2030. 

What is a Gold Loan? 

A gold loan or loan against gold is one of the most popular and simple forms of secured loans. In this type of loan, the borrower pledges gold items as collateral. The gold loan amount depends on the gold value or per gram rates at the prevailing market price of gold. One of the reasons why gold loans are so popular is that there is no need for a specific credit score or income documents as gold itself serves as a guarantor. Being a secured loan, the interest rates on gold loans are quite low and affordable as compared to other loans.

Moreover, gold loans do not come with any end-use restriction and the borrower can use the loan proceeds as per his wishes. But there are certain things like minimum gold weight or loan amount you need to follow while applying for a gold loan. While going for a gold loan, there are certain things that a borrower must consider and they are given below: 

  • Check whether the lender offers flexible repayment mechanisms. 
  • Compare the rates of interest offered by different lenders and choose the one with the lowest interest rate. 
  • There are two subcategories of gold loans – EMI-based loans and Overdraft on gold loans. The former is more suitable for planned expenses whereas the latter is ideal for meeting business cycle expenditures.  

Now that you are well aware of the meaning and benefits of a gold loan, let’s shift our focus towards another loan form – a loan against property. 

What is a Loan Against Property? 

A loan against property is a type of secured loan in which borrowers pledge their physical property like land, house, car, etc as collateral to avail of a loan. The value of the loan varies between 40-75% of the property value depending on the lender’s policies. Some of the features of a loan against property are higher loan amounts, low interest rates, and longer repayment tenures. 

Both self-employed and salaried individuals are eligible to obtain a loan against property. Unlike gold loan provider, property loan lenders requires multiple verifications and long list of documentation. One needs to produce the property documents like a registration deed, property tax papers, valid ID proof of property owner, and income statement for the last 3-6 months to obtain a Loan against the property. 

Comparison of Gold Loan and Property Loan 

Given below are some comparison pointers between gold loans and loans against property: 

Parameters  Loan Against Gold Loan Against Property 
Meaning  It is a type of secured loan that one can avail of by pledging gold jewelry. Also a type of secured loan but here the collateral is physical property like land and buildings.
Tenure  The loan tenure ranges from 6 months to 1 year or 2 years. The loan tenure is longer in the case of a loan against property 
Documentation  Only valid identity, Address proof & PAN are required.  Income documents, property documents, and valid ID proof are required to obtain this loan.  
Processing Time  There is instant disbursal within 30* min of the loan amount as soon as formalities are completed.  Longer processing time as the lender conducts inspection and field visits of the property to ascertain the authenticity. 
Loan Amount  Generally, the loan amount is up to 75% of the value of the pledged gold. Loan amounts are generally up to 70% of the property value. 
Ideal Uses Emergency, Agri, Shopkeeper Home Loan, Plot loan, and other planned expense
Interest Rates Typically higher compared to loans against property due to the shorter tenure and higher risk. Typically lower compared to gold loans as the collateral value is higher and the tenure is longer.
Repayments Usually, repayment is in the form of bullet payments at the end of the tenure, or EMI (Equated Monthly Installments) options may be available. Repayment is generally in the form of EMIs, which include both principal and interest, spread over a longer tenure period.

Gold Loans vs Property Loans- Which is best? 

Gold loans are quite effective in tackling immediate financial crises like paying hospital bills, unexpected home renovation costs, or wedding expenses. Unlike loans against property, You don’t need income documents, credit scores, and property documents to avail of a gold loan. Only PAN and Aadhar card and address proof will suffice and there is no need to produce any documents. 

why gold loan is better then property loan

Furthermore, the approval process for loans against gold is quite simple and fast compared to property loans. Once the gold purity is checked and KYC formalities are completed, an instant fund transfer will take place in the borrower’s bank account. On the other hand Property loans require multiple verifications including physical verification, which takes more than weeks. This makes loans against gold a more suitable choice for emergency loans.

Another area where gold loans score big over loans against property and other unsecured loan types is the overdraft facility. Under this, a limit is ascertained by the lender keeping in mind the value of the gold item. Borrowers can borrow as much as they want up to the specified limit and they do not have to worry about monthly repayment. Gold loan overdraft facility is a good option for business people and shopkeepers.

A gold loan offers lower interest rates compared to a loan against property. While your CIBIL score significantly impacts the interest rates for a property loan, this isn’t the case for jewel loans. Additionally, you can conveniently apply for and receive a gold loan from the comfort of your home, unlike property loans, which require a visit to a bank or NBFC branch for application submission and documentation.

Need A Gold Loan – Choose Sahibandhu 

When looking for a gold loan, Sahibandhu is the right choice for you. Sahibandhu is India’s leading gold loan aggregator that offers loans against gold at attractive interest rates allowing you to manage your financial emergencies in an effective manner. Here are some promising reasons why you should choose Sahibandhu gold loans: 

    • Online Services/Apply Online: Apply for a gold loan online with Sahibandhu by visiting and registering on the website or call 18003098440 for quick assistance. 
    • Doorstep Services: Once you register on the website, Sahibandhu’s executives will visit your house to complete formalities and immediately transfer the loan amount. 
    • Zero Paperwork: The documentation process of Sahibandhu is completely digital and there is no requirement for hard copies of any document.    
    • Multiple Lending Partners: Avail gold loans with Sahibandhu’s trusted banking partners like Axis Bank, ICICI Bank, and HDFC Bank.
    • Affordable Interest Rates: Sahibandhu gold loan interest rates are lower compared to other lenders. 
    • Flexible Repayment: Sahibandhu offers flexible repayment gold Loan schemes like SahiFlexi, SahiMax, and SahiDelight.
  • Refinance your loan: Sahibandhu also offers refinancing options, enabling you to transfer your existing gold loan to Sahibandhu to take advantage of their lower interest rates and better terms. This can help reduce your overall loan burden and make repayment more manageable. 


Both gold loans and loans against property are effective financing options having their own uses and applicability. However, when it comes to quick funding and minimal documentation, gold loans score higher than loans against property. A loan against property is useful for meeting planned financial requirements whereas a gold loan is ideal for meeting financial emergencies.

If you are looking for a loan, explore gold loan offers. Sahibandhu Gold Loans with its array of facilities and customer-friendly approach is the go-to platform for availing gold loans.

Apply for a gold loan 24/7 on, or call at 18003098440

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Frequently Asked Questions

In the case of property loan, the total loan amount can be between 40%-70% of the property value and it varies from one lender to another.

The factors that influence the gold loan amount are prevailing market price, gold purity, loan-to-value ratio, and lender’s internal policies. Want to know more about how to avail of a gold loan, call our representatives on the toll-free number 18003098440.

Yes, Sahibandhu offers an overdraft gold loan in addition to EMI-based gold loans. You can choose either of them as per your requirements. For more information on OD gold loans visit

About the Author

Loan Against Gold vs Loan Against Property: Which Is Right For You?

SahiBandhu is India's largest gold loan aggregator platform enabling people to access loans against gold around the country. We provide a one-stop solution for availing gold loans from multiple banks. We prioritize financial literacy, ensuring that borrowers understand the terms and benefits of obtaining a gold loan service.

Disclaimer: The information provided in this blog is only for representational purposes. Sahibandhu functions under well-defined terms and conditions and readers are free to review them before starting the gold loan process. If you have any doubts or want further clarifications about Sahibandhu gold loan services, feel free to reach out to us at 18003098440 (toll-free).

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