The iconic statement is by the American financier and investment banker who dominated corporate finance on Wall Street. J.P. Morgan encapsulates his belief in the concrete value of precious metals compared to the more abstract nature of other financial assets. By emphasizing the role of gold and silver as genuine money, he implies their stability and time-tested reliability.

Anyone can face a situation where the available funds or income is not sufficient to cover certain expenses. Such a situation can be a medical emergency for self, in-family or it could be expense related to a family wedding or for higher studies. Today, there are many credit options available to overcome such short or mid-term crises including personal loans, credit card loans, and gold loans. Many lenders are offering online applications for processing that
can be completed in minutes if one has relevant KYC documents handy. However, it is very important to have a clear understanding of available credit options. Here are a few points that one must consider before making the decision:

1. Immediate fund availability: When there’s an urgency i.e. immediate fund requirement, the quickest and hassle-free form of credit is – a gold loan. Unlike a credit card loan comes with a lengthy application, and KYC documentation followed by assessment, a gold loan needs only a valuation of the asset and the fund is disbursed
seamlessly. The borrower has to pledge the gold and obtain the funds required. No documentation and credit checks.

2. Lower Rate of Interest: The rate of interest on gold loans is generally lower than the interest on gold loans. Gold (jewelry) as collateral gives security to the lenders to offer a lesser rate of interest.

3. Higher Loan Amount: It is the KYC documentation that decides the loan eligibility in the case of credit card or personal loan; whereas for gold loan the value of the asset decides the loan eligibility. So the larger the value of gold, the higher is the loan amount too and there’s no limit.

4. Low Processing Charges: Gold loans incur the least processing fees and, hence are always cheaper than other loans. Gold loans do not have pre-payment charges too, they is more cost effective.

5. Hassle-free process: Since gold loans do not require KYC and other documentation, the process is much easier, quick, and convenient. Unlike credit card loans or personal loans where KYC and other documentation is much lengthier comparatively.
6. Credit score not applicable: Since the borrower is submitting gold as collateral no other documentation is needed. In fact, a gold loan is the best option for borrowers with lower credit scores.

7. Open purpose loan: The gold loan has no purpose restriction. Suppose the borrower has taken a loan for children’s education and the career plan is changed, the loan fund can be used for any other purpose. This may not be feasible in a personal loan.

A gold loan is based on tangible wealth whereas other loans are derived from the trust and credibility bestowed based on financial systems – and that is the key distinction between a gold loan versus a credit card loan. And that is why the gold loan is a better credit form than any other type of loan.