If you're a salaried professional dealing with urgent financial needs, you can rely on a Salary Advance Loan to fulfil your monthly obligations. This unsecured short-term loan is exclusively for salaried employees like you. Its quick application process ensures funds are disbursed to your account within days for added convenience and the repayment process begins after your paycheck is deposited.
In this blog, we’ll explore the benefits of a salary advance loan, eligibility criteria, how to apply for it, and tips for stress-free repayment. Read on!
Benefits of a Salary Advance Loan
A Salary Advance Loan comes with the following benefits:
- Collateral-free
Salary advance loans are unsecured, which means you do not have to pledge any collateral to apply for the loan.
- Swift Loan Approval and Disbursal
No need to undergo tedious loan formalities and documentation with salary advance loans. Expect quick approval for your loan amount and swift disbursal without delay.
- Not Dependent on High Credit Score
Salary advance loans do not require a very high credit score. This helps you to borrow the funds you need without any worry.
How Do Salary Advance Loans Work?
With a salary advance loan, salaried employees can receive a portion of their remuneration in advance to fulfil their specific financial needs. Once their salary is credited, they can repay the loan in instalments as per their loan agreement and repayment schedule.
Here is an example of how a Salary Advance Loan works:
Suppose you need money due to a medical emergency and require a month's salary in advance. Your employer can pay a portion of your remuneration in advance. These advances will be repaid by you in instalments. Usually, the instalments of salary advance loans are interest-free.
Qualifying for a Salary Advance Loan
Here are the factors to ensure when applying for a salary advance loan:
- Your age must be between 21 and 58 years.
- You must show income proof, identity proof, and documents that include your professional and financial details.
- You must abide by the minimum salary requirement.
How to Apply for a Salary Advance Loan?
Here are the steps that will help you apply for salary advance loans:
Step 1: First, visit the official website of your preferred lender and check their loan eligibility criteria.
Step 2: Click on ‘Apply now’ and enter the necessary personal and financial details.
Step 3: Upload the required documents and submit them for verification.
After successful processing and verification, the approved loan amount will be credited to your bank account.
Tips for Successful Repayment of Salary Advance Loan
Here are the tips that will ensure successful salary advance loan repayment:
- You can choose to repay the salary advance loan in several instalments or a lump sum.
- It is best to repay the loan amount as soon as possible to avoid paying hefty interest costs.
- Make sure to go through the terms and conditions of the loan. Read the contract carefully and reach out to the concerned authority if you have any questions.
Repayment Schedule and EMI Calculator for Salary Advance Loans
The repayment schedule of salary advance loans is usually 3-12 months. You can calculate the estimated repayment amount with an EMI calculator based on the principal loan amount, interest rate, and tenure.
Comparing Salary Advance Loans from Different Providers
Mentioned below are some pointers based on which you can compare salary advance loans from different lenders:
- Evaluate Interest Rates and Fees
Different lenders offer different loan terms for salary advance loans. Make sure to compare the interest rates and other applicable charges of the lender to make an informed decision. It will help in analyzing the overall cost of borrowing.
- Check the Terms and Conditions
You must read the loan agreement carefully before applying for a salary advance loan to make an informed decision. Doing so will also help you understand whether the loan is a good fit for you or not.
How to Use Salary Advance Loans Responsibly
Here are some pointers following which you will be able to ensure responsible usage of salary advance loans:
- Avoiding the Debt Trap with Salary Advance Loans
You must be mindful of the loan amount you need. Borrowing more than you need can lead you to a debt trap.
- Planning Your Finances with Salary Advance Loans
You must prepare a repayment plan before applying for a Salary Advance Loan, which will help you to successfully bridge monetary issues and achieve your financial goals.
Also Read - What is Personal Loan? Things You Should Know
To Conclude
Salary advance loans can help mitigate financial challenges like routine living expenses, medical expenses, or transportation costs. However, as a salaried employee, you can also apply for a Personal Loan from Poonawalla Fincorp, which offers a higher amount as compared to salary advance loans. Go ahead and apply for a loan that best meets your requirements.
