If you are looking to buy a car, then a car loan and a jewel loan (gold loan) have their own set of benefits and can be applied for based on one’s needs and requirements.
To buy a car, you must first consider the loan amount that you wish to borrow. If you have enough gold in the form of coins or jewellery to pledge, then you can go in for a gold loan as they have very low interest rates. But, in the case of a gold loan, only 75% of the gold’s market value is given as the loan amount. If this does not suffice for buying a car, you can do in for a car loan as there are banks that offer up to 1 crore for the purchasing of the vehicle.
Interest rates for a car loan begin at just 8.40% but can go up to 16% based on one’s credit score and credit history. If you do not have a good credit score then you will be charged a higher rate of interest with the bank and you can opt for a gold loan as they have interest rates of just 9.95% and can vary just a little from bank to bank as credit score is not important for availing a gold loan as it is secured.
Tenures for a car loan can range from 1 year to 7 years or even longer. Gold loans have comparatively shorter tenures than range from 3 months to 4 years. Some banks/lenders offer 5 years on a gold loan.
So, you can make your decision based on the loan amount, interest rates and tenures that suit your needs. Also, check your credit score before applying for a loan.