Advance Salary Loan

Advance salary loans or quick salary loans offer employees a chance to take care of any unaccommodated expenses. An employee can avail of these loans from banks and NBFCs against their salary. The average interest rate charged by a lender is 5%, and repayment tenure is quite short. Employees can get advance salary loans amounting to up to Rs. 2 lakhs. This amount can help them with unannounced needs or get a headstart on due payments.

What are Advance Salary Loans?

Advance salary loans are an excellent means to get quick, short-term financing when a requirement arises. They provide an easy method to borrow against a salaried professional’s next paycheck without incurring additional debt. The advance salary loans can be used to pay for unforeseen needs or to get ahead on payments. All of these elements – ease, a straightforward application process, and speedy funds – make quick salary loans an excellent choice when there is a need for immediate cash to make through day-to-day living expenditures.

Advance Salary Loan interest rate Comparison of top lenders

Many lenders claim to offer the salary advance loan at the best interest rates. However, only one is the right fit for all your needs. Monthly interest rates on advance salary loans can range from 1% to 6%, with an average APR of 25-50%. Even if the advertised interest rate is in the single digits, the APR (Annual Interest Rate) might be fairly high.

Instant salary loans have a shorter repayment time than other loan types. Depending on the lender, these loans might last anywhere from a week to three years. As a result, these loans are excellent if you want to borrow a small sum and repay it quickly. 

Features and Benefits of Advance Salary Loans

The features and benefits of advance salary loans are given below.

• The monthly interest rate generally runs from 1.5% to 3%.
• Short loan terms result in speedier repayment and lower EMIs.
• You can get a loan for anything between Rs. 50,000 and Rs. 2 lakhs.
• Because this is an unsecured loan, no collateral is required.
• There are minimal or no pre-closure fees.
• Loan funds are disbursed quickly, with little or no waiting period.
• The lender chooses the loan amount and length based on the borrower’s credit score, salary, existing loan (if any), and employment stability.

Eligibility Criteria for Salary Advance Loan

The advance salary loan eligibility criteria differ from one lender to another. The advance salary loan application typically requires the following eligibility to be met.

• The minimum age for loan applications spans from 18 to 25 years, with a maximum age of 65 years. It varies from lender to lender. To qualify for the loan, you must have a salaried job or be a self-employed businessman or professional.
• You should have a consistent source of income so that you can readily repay the loan. The lender may impose a minimum income requirement.
• Your credit score should be greater than 650 in order for the loan to be approved without difficulty.

Documents for Salary Advance Loan

The documents required for the salary advance loan are given below.

• Recent and coloured photograph
• Identity proof includes PAN Card, Aadhaar card, Voter’s ID Card, driving licence, and passport.
• Age proof like PAN Card, Aadhaar Card, Passport, Voter’s ID Card, driving licence, etc.
• Income proof like salary slips or financial statements of your business
• Address proof like an Aadhaar card, Voter’s ID card, driving licence, passport, utility bills, etc.
• Bank statements for the last 3-6 months

Need of an Advance Salary Loan

The quick salary loans cater to a lot of needs of a borrower. A few of the needs highlighted the need for an instant salary loan.

• Many people want a considerable sum of money as a deposit when renting or purchasing a home. Salary advance loans assist people in meeting this expense while also securing a place to reside.
• With rising tuition costs and an increased need for upskilling, income advance loans can help fund education costs.
• Unexpected house or automobile maintenance costs might occur at any time. A salary advance loan might provide immediate access to funds to address such costs.
• Salary advance loans may be utilised to pay off credit card obligations, electricity costs, or medical bills.
• Weddings can be costly, and a salary advance loan can help fund the costs involved, such as venue, catering, and décor charges.
• Other unforeseen needs may come at any time, in which case a salary advance loan may be useful.

Tips for Choosing the Right Advance Salary Loan

Choosing the right instant salary loan is a tough decision. The following things must be remembered before applying for a salary advance loan.

• Do as much research as you can, including lenders, interest rates, and repayment choices. Look for more consumer feedback, and make sure to read the terms and conditions. 
• Compare interest rates from several lenders and choose the best fit for you. The interest rate has a significant impact on the repayment schedule and the overall cost of the loan.
• You should verify your credit report. This will assist you in identifying any inaccuracies or potential problems with your credit score that may damage your ability to qualify for the loan.
• Before accepting a loan, it’s critical to ask any concerns you have regarding the loan and ensure that all of the terms and circumstances are clear. Don’t be afraid to inquire about costs, payback periods, or any other aspects of the loan.
• Before signing, properly understand the loan agreement’s terms and conditions. You should also ensure that you understand how payments will be made and how to get in touch with the lender.

Apply for Salary Advance Loan Online

To apply for a salary advance loan online, follow the steps below.

• The applicant must submit the necessary personal and professional information on the application form.
• The bank or financial institution will check the application form after you have completed it. Once authorised, the applicant must provide the relevant documentation.
• The applicant must supply the lender with specified KYC documentation. These documents can be emailed or uploaded to the lender’s internet site.
• After the documents are verified, the loan amount will be processed and promptly sent to the applicant’s pay account.