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Advance Salary Loans are temporary loans offered for salaried professionals in India. Unlike personal loans, the interest rate for these loans is calculated on a monthly basis or even daily basis by some lenders. The interest rate and other loan terms are likely to vary from one lender to another. One of the notable advantages of these loans is that they are available even to individuals with a moderate credit score. Moreover, there are many lenders that disburse advance salary loans within a matter of hours, if not minutes. Due to this fast processing time and high-risk nature, these advance salary loans come with significantly high annual percentage rate (APR).
Though the repayment terms are highly favourable to the lenders, these loans could help an individual during a dire situation. It is advisable to opt for these loans only during emergency situations when there are no other options available.
There are many companies that offer these types of loans in India. While some companies restrict themselves to providing short-term advance salary loans, others provide flexible long-term loans based on the creditworthiness of the borrower. Almost all these loans are approved within a few hours through paperless verification. As noted earlier, the terms and conditions of these loans vary from one company to another. Let’s check out some of the popular advance salary loan providers in the country:
EarlySalary is one of the most renowned firms that offers advance salary loans with 100% online paperwork approval. Customers can download the app to get instant salary advance for their emergency cash requirements.
This is a company that offers advance salary loans with flexible terms. It offers loans up to 2.5 times your monthly salary with minimal processing time.
This company offers short-term loans to both salaried professionals as well as self-employed individuals. Loan approval is instant, and disbursal is done within just 24 hours.
This is a company that offers advance salary loan disbursal within a few hours of application. The loan amount can be used for any of your emergency financial requirements.
Flexsalary is a financial service provider that offers personal loans digitally. Customers can get easy access to instant loans for various needs including emergency medical expenses, marriage, home renovation, etc.
The loan offered by Credit Bazzar is ideal for your short-term cash requirements. Here, loan approval is provided only after calculating the borrower’s ability to repay the loan amount.
This is a short-term loan service provider that offers advance salary loans at an affordable interest rate. Customers can apply through the company website or through the mobile app to get the loan amount.
These are some of the popular advance salary loan lenders operating in the Indian market. As you can see, the interest rate and other terms vary a lot from one service provider to another. Most of these loans are approved and disbursed within just a few hours. Some lenders even promise loan disbursal within just a few minutes. In addition to advance salary loans, some lenders also provide other financial services like personal loans, loan against collateral, etc.
Most banks and lenders have a similar system when it comes to applying for an advance salary loan. The broad steps to follow are:
Step 1: Fill in the online application form or a hard copy of the application form available at the nearest lender’s branch office. This contains your personal information, professional information and details of income. It also contains information about your loan requirement and reason for the same.
Step 2: Wait for conditional approval. All you do here is wait for the application to make its way to the desk of the bank official who has to scrutinize it and approve it. Once approved, a communication will be sent to you from the lender saying your application has been approved and asking for a set of documents (as mentioned above).
Step 3: Know Your Customer (KYC) and document collection. Once you receive your approval, you must collect the required documents – identity proof, address proof, age proof, details of employment, proof of income and some specimen signatures. You can also send these across via e-mail, which makes the process a lot faster.
Step 4: Credit to your account. Once the documents have been verified by the lender, the amount requested will be credited to your regular salary / business account.
There are many lenders who approve the application and credit the amount in your bank account in matter of a few hours, once they establish your identity. It is recommended to anyone who’s considering advance salary loans to explore all other available options first. If none of the other options available (including asking family and friends, or even getting a second job) prove to be unfeasible, or work out more expensive, only then are borrowers advised to take advance salary loans. The interest rates are high, and so are the stakes.
Some banks waive off processing fees and other additional charges. It is important to choose the right combination of lender, approval time, interest rate, repayment schedule and loan amount in order to judiciously plan out your finances and make sure you are not making the wrong decision.
While the banks and lenders don’t put too much stock by your past credit history, they still require you to meet certain conditions and check certain boxes before they approve your loan.
Please note that the above income requirements are indicative. Different banks and lenders require different incomes in this regard.
Banks and lenders do not focus excessively on your credit score unless it is extremely poor. However, you will be required to furnish an original set of documents so that they can establish and verify the details you furnish in your application.
Just as advance salary loans have a host of benefits, they also have many disadvantages that could hurt your financial standing in the long run.
No. There are no restrictions imposed by lenders regarding how you use the loan amount. You may use it for any of your short-term cash requirements. Though some companies ask the reason for taking the loan, there is no need to provide any bills to prove the expenses.
Yes. Most companies in the market allow foreclosure of advance salary loans. Some companies impose charges on the customer if the loan is foreclosed before its tenure. However, there are companies that have zero foreclosure charges.
It is better to have a credit score over 650 to get an advance salary loan. Since advance salary loans are processed within a few hours, most lenders provide loans even if your credit score is not so perfect. However, those with poor credit score may have to pay a higher interest rate to the lender because of the risk factor associated with the lending.
EMI calculators are offered by most of the lenders in the market. You need to enter your loan amount, interest rate, and loan tenure in the EMI calculator to know the instalment amount.
Yes. Late fees are applicable if you fail to make the instalment payment on time. The amount charged as late fee differs from one company to another. You need to check the loan document or enquire with the company about the late fees and other charges.
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