With Christmas just days away, the need for Festive Loan increases. Yet, is it necessary to avail for one? The festive season brings loads of offers and discounts in its way, and people end up spending in the urge to buy a maximum number of items. Putting a huge hole in your pocket is not your plan of action. In such cases, you might end up in a dilemma on what to choose – Gold Loan or Festive Loan.Another the best option is to sell gold rather than getting gold loan or festive loan. Also Getting a  loan is a difficult and long process as compared to Cash against Gold which gives you the actual value.

According to a statement released by the Reserve Bank of India, loans come with its own set of rates based on the borrower’s profile. With regards to the Festive Loan, you can opt for one with offers and discounts. None of it is interest-free. To follow-up on the same, you must have a thorough read on the banking institution’s terms and conditions. 

Form a mind map and check if you need a loan to fulfil a short-term or long-term need. If you have plans for long-term, avail for a Festive Loan that comes with a distinctive set of offers. Avoid doing the same for short-term, as it will add on to the burden and seem inappropriate.

Let us dive into the benefits of a Festive Loan,

1. No cost EMI

Connected with the borrower’s risk profile, a No Cost EMI comes with a Rate of Interest. The rate is covered through a Processing Fee, and additional taxes levied on the borrower. Frequently, online shopping platforms sign contracts with potential lenders to get rid of discounts. This is followed in the case of huge expenses. Sometimes, the borrower will also be levied with a joining fee. To be aware, look into the options pertaining to the same.

2. Cashbacks

Lenders in credit card companies indulge in this procedure to lure the customers. But, getting hold of a cashback is easier said than done. Cashbacks are used for shopping expenses and festivities. An e-wallet or gift voucher will be the devil as they come to use only when you purchase an expensive set of items. So, you will end up spending more. 

Whereas, the benefits of a Gold Loan over a Festival Loan are,

• The interest is lower, in comparison to the Festive Loan; Processing Fee is lower for Gold Loan
• Documentation is minimal 
• Turnaround is quick
• Repayment is flexible
• LTV ratio is up to 75%
• Pledged gold articles are safe

Apart from this, let us look into some other banks providing Gold Loan 

With the Gold Loan Interest rate, let us also get into Festive Loan Interest Rates,

In the case of Festive Loans, the State Bank of India has declared a concession rate of up to 25 bps. This applies in the case of Home Loans during the festive season. If the loan amount is INR 74 Lakh or more, you will be offered up to 20 bps. 

HDFC Bank, on the other hand, provides low-cost EMIs. This applies to car loans. If you are a Salaried Individual, the rate levied will be 7.90%. For the processing of auto loans and personal loans, banking institutions provide a 50% discount.

Moving on to Axis Bank, they have some attractive offers and discounts on the go. The borrowers can opt for Home Loans at the rate of 6.9% p.a. Auto Loans are offered at 7.99%, and the EMIs on two-wheelers are at INR 278 on a monthly basis.

Having drawn a comparison between Festive Loans and Gold Loan, you will have a clear version on what to avail for. Because, when you have a huge hole in the pocket, there is no harm in availing for a loan. Do not feel degraded or demotivated if you run short on funds. Instead, opt for anyone.