Advance Salary Loan - Best Fit for short-term Needs

Posted by Trishya Sharma on December 20th, 2019

Awaiting Pay-check? Salary Advance Loan Can Help Meet your Short Term Needs!

Unexpected expenses strike when you are ready for them- at the middle of the month, once you have paid EMI your rent, and utility bills. It has happened at some stage to most people.  What should you do?  Ask family or friends to get a loan?   Neither of those options sound attractive since they place you in an awkward position or mess up your financial plans.  This is where a "Short Term Loan" comes into the picture.  Nowadays, many lending companies have begun to provide short terms loans for various reasons and have made it quite a simple task to get lower ticket loans for a tenure less than unsecured loan, generally  up to 12 months.

What is Advance Salary Loan?

Advance Salary Loan is a loan that is used to take care of unforeseen, immediate in nature or expenses which may come up because of unexpected overshooting while traveling, medical emergencies or similar instances.  This sort of loan is called a "short-term loan" because it's availed for a brief duration.

Why should one opt for a Short Term Loan?

This loan can be a savior when used right because of these features:

1. Lower interest Payment:

Mostly, the tenure of short-term loans is just 12 months; this automatically translates into overall lower amount of total of interest payment. Longer loan tenures generally involve a relatively higher interest amount owing to the duration factor.

2. Can help in improving your credit score:

Getting a short-term loan is easy, and you can repay it within a few months. Repaying these loans within the given time will improve your credit score.

3. Leads to better financial management:

Owing to the shorter loan tenure, you can maintain a firm grasp on your finances without too much pressure of the loan debt. The debt lasts only for a year and does not tie up your money for a longer duration like other longer-term loans.

Must-knows of Advance Salary Loans:

1. Hassel-free and instant loan disbursal: You just have to fill a simple application form online and there’s no hassle of visiting the bank, document submission or waiting for long to be assessed for credit worthiness. Additionally, the amount of advance salary loans is smaller compared to that for loans, as well as the tenure is shorter.  Thus, taking this loan doesn't put too much pressure on the borrower.

2. Simple eligibility criteria: Advance Salary loan allows you to avail 2.5 times your earnings for anywhere between 3 to 12 months

3. Repayment flexibility and customization: Some lenders will let you repay the loan quickly without paying any pre closure charges or penalties post 6 months of servicing the loan regularly

4. No collateral needed: This type of loan does not require you to pledge any collateral or security

Advance Salary loan vs Personal loan?

It is undoubtedly superior to take a salary advance loan than a long term personal loan. Let us understand, why should one opt for this loan. Customizable and ideal for smaller loan amounts. Advance Salary Loan can be obtained for amount as small as Rs 25,000. Personal loans generally tend to get a ticket size that is far greater. Short term personal loans have a repayment tenure longer than advance salary loans and so the interest one eventually end up paying is considerably more.