Should you take a personal loan via GPay? Pros, cons, and hidden charges explained
Google Pay now helps in connecting users with partner banks and financial institutions, providing personal loans from ₹30,000 to up to ₹12,00,000 with interest rates starting from about 11.25% per annum.
The entire process of loan form submission takes place within the application. For the same you must submit your Know Your Customer i.e., KYC details, receive approvals and post the same the loan is disbursed in hours. Still, keep in mind that taking a loan comes with its own risks.
Who is eligible and what are the costs?
Personal loan applicants generally need to be aged between 21 to 57 years. Along with the same, a credit score of at least 600 to 700 is a must. Not only this, you must also have a stable source of income. Loan tenures range from six months to five years, with the EMIs i.e., Equated Monthly Instalments debited automatically from the linked bank accounts.
It is also important to note that rates vary by lender: Some start at 11.25% whereas others quote from 13.99% or higher. Aspirational borrowers must compare rates carefully and check out the offer details properly.
These rates are directly linked to the applicants repayment history and credit scores. There are also several hidden processing charges or prepayment penalties fees that could apply on loan products that is why all such factors should be considered and carefully checked before applying for any particular personal loan.
5 Simple steps to apply for a personal loan via Google Pay
- Update the Google Pay application and link it with your active bank account.
- Move to the “Loans” section under the “Manage your money” tab.
- Check for eligible offers displayed on your screen based on your credit profile.
- Complete the loan form KYC, digital photo submission along with e-mandate setup.
- Upon approval, funds will be disbursed. Do ensure enough balance for EMI auto debits.
Potential risks and alternatives
Given several users do appreciate the speed, seamlessness and no paper process. Still, it is always prudent to be careful. Expert voices and user comments caution against accepting the first offer provided to you without evaluating the complete terms and conditions.
Discussing the same a Redditor noted: “They are third-party lenders, and Google Pay has no control over the loan terms or offers. These are determined solely by the partner banks or NBFCs based on your credit score and credit history.”
Whereas another user proclaimed that, “Interest rates are higher than usual compared to a bank. But otherwise, it’s fine.”
Therefore, keeping these important factors in mind, alternatives such as overdraft facilities, credit card interest free periods or personal loans against mutual fund investments could prove more cost efficient.
Therefore, taking a personal loan via Google Pay definitely offers unmatched convenience and quick approvals, but interest rates and fees vary widely. It is crucial to compare offers, check eligibility criteria, discuss with certified financial advisors and read the fine print before committing.
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Disclaimer: Mint has a tie-up with fin-techs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
