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LAMF vs. Gold Loan: Better Collateral Option?
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Gold loans offer cheaper rates and faster cash but halt asset growth; LAMF stays digital, retains compounding, and suits longer financial planning goals.
Gold loans typically cost 7–11% annually—slightly lower than Loans Against Mutual Funds (LAMF) at 9–12%—but they require pledging physical gold. LAMF, in contrast, is a fully digital process with no valuation visits or branch paperwork. Gold loans offer 75% loan-to-value (LTV), while LAMF ranges from 50–80% depending on fund type. The key difference: gold assets earn nothing during tenure, whereas mutual funds keep compounding 10–15% annually. Gold loans suit short terms; LAMF fits longer horizons and ongoing portfolio growth.