Gold loan vs FD loan vs stock loan: Which asset gives you the best deal?
As borrowing aspirations and appetite rise in India, a number of borrowers are turning towards secured personal loans by pledging fixed deposits (FDs), gold or equities. These asset backed loans provide faster approval, lower interest rates and easier approvals in comparison with unsecured lending options.
Lenders find asset-backed loans safer due to availability of collateral, while borrowers enjoy easier and better borrowing terms.
Why secured loans appeal now
Borrowers can raise money in the form of a loan without having to sell the assets as they can give them as collateral to lenders.
Rajeev Das, CEO of I-Loans and CRO at LoanTap, says “Borrowers can unlock the value of their idle assets without liquidating them. In a country where gold and FDs are common, secured loans offer smarter and safer funding, especially for urgent, short-term needs. Plus, they often require lower credit scores.”
Credit should be used responsibly
Credit products must always be used in a responsible manner. Elaborating on the same idea, Vibhore Goyal, Founder at OneBanc, says “Personal loans were meant for emergencies, now they’re fuelling risky bets. Gen Z borrowers are taking loans at 13–18% interest to chase crypto and stock market hype, often driven by fin-fluencers. One in four now uses unsecured credit for investments, per TransUnion. This shift distorts demand, inflates bubbles, and raises default risks. A safety net has turned into a FOMO engine—and that’s dangerous.”
Keeping the above factors in mind, let us hence discuss the conceptual differences between these unique loan products:
FD-backed loans: Safe and steady
Loans against fixed deposits are simply borrowing of funds by keeping the fixed deposits as collateral. These loans are ideal for risk averse borrowers. Banking institutions usually lend up to 90-95% of the fixed deposit amount at rates which are just 1-2% above the deposit rate. For example, with the State Bank of India (SBI) providing FDs at 6.5-7.1%, loan rates range from 7.5-9%. Hence, your FD continues to earn interest during the entire loan tenure, assisting in preserving both capital and liquidity.
Such loans are also much easier and seamless in nature to secure. As the lending institutions already have a solid collateral to back the lending funds on. Due to the same the interest rates offered to borrowers are also lucrative in comparison with unsecured loans.
Gold loans: Backed by rising prices
Gold loans are secured loans where borrowers pledge their gold assets and jewellery as collateral. This is done to secure funds in seamless fashion to meet urgent needs. Such an arrangement offers faster disbursement of funds, flexible repayment terms and lower interest rates compared to unsecured loans.
With gold prices hovering in the range of ₹95,000 – ₹99,000 per 10g currently, loans against jewellery continue to remain a popular choice. Lending institutions such as Muthoot Finance recently registered healthy growth in Q4 net profits. Its Q4 net profit soars 43% to ₹1508 crore and it has set a 15% gold loan asset under management (AUM) target.
Such numbers are clearly signifying the kind of growth the nation is witnessing in gold loan disbursals.
Now the loan to value i.e., LTV ratio is generally capped at 75%, RBI allows up to 85% for loans under ₹2.5 lakh. Rates for such loans start at 8.75%, with many lenders also providing festive discounts.
As of July 2025, Muthoot Finance provides gold loans products as the One Percent Loan ( ₹1500 – ₹50,000 at 12% interest rate), Ultimate Loan (at about 22% with rebate) and Delight Loan (up to ₹5 crore). On the other hand, Manappuram provides regular, seamless loans online and doorstep gold loans with rates starting from 9.90%. These loans are popular options that are looked at by borrowers to meet their urgent financial obligations and day to day needs.
Stock-backed loans: For savvy investors
Loans against shares and mutual funds provide up to 50% of the asset value with applicable interest rates starting from 10.5%. Still, such loans are a little different from gold loans and fixed deposit based loans. As these come with market risks. A sharp decline in share prices or mutual funds NAVs may result in margin calls or liquidation. These loans are prudent options for sincere and disciplined borrowers who have a high risk tolerance capacity.
Therefore, choosing the right asset backed loan depends entirely on factors such as your risk appetite, future financial goals, discipline and repayment potential. You should seek help from certified financial advisors before applying for any particular loan product, so that you are able to make the best decision for yourself and your family.
Fixed deposit and gold provide better stability and better terms, whereas stocks suit confident borrowers. Hence, as lending institutions innovate and interest rates remain competitive, secured personal loans are emerging as a smarter alternative to meet short term financial needs without disrupting long term wealth generation.
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