Advance Salary Loan
“The most important investment you can make is in yourself.”
A shortage of funds may occur many times before getting the salary to your bank account. In that situation, advance salary loan help. In another manner, one can say that advance salary loans are temporary loans offered to salaried professionals who are working in India. Like a personal loan, the interest rate of these loans is calculated every month or sometimes daily by some lenders. The foremost advantage of these loans is that they are available to those individuals with an average credit score. It does not take more then half an hour if the person is opting for an advance salary loan. And due to this, there is a high factor of risk involved. Hence, advance salary loans come with a high percentage rate.
One is advisable to opt for an advance salary loan in an emergency when no other options are available.
Eligibility criteria for advance salary loans
- One should be at least 23 years of age at the time of applying for an advance salary loan.
- There are different parameters for different cities as per the earning of the person.
- Rs. 40000 if you live in Delhi/NCR, Mumbai, Banglore, Hyderabad, Chennai or Thane.
- Rs. 35000 if you live in Pune, Ahmedabad, or Kolkata.
- Rs. 30000 if you live in any other city in India.
Note: The above income information is subjective by nature. Different banks and lenders have their income norms.
Here are the documents required for advance salary loan:
- Banks and lenders check your credit score.
- Address Proof- Telephone bill, Rental agreement, Passport, Driving license, Ration card, etc.
- Photographic identity proof- Passport, Driving License, PAN card, etc.
- 6 Passport size photos.
- Signature proof- Passport, PAN card, Bank verification letter, etc.
- Current employees- Your salary slip, Your salary slip.
- Previous employees- Your appointment letter and salary slips.
- Bank statement- Bank statement showing salary credit of a minimum of three months.
- Employee proof- Your ID card or business visiting card.
Features of advance salary loan:
- Minimum and zero closure charges: Loans can be closed, by paying no penalty or paying minimal costs.
- Online account access: One can keep a real-time check on their finances like how much they own.
- Cover financial emergency: Any financial crisis you may have you could get the advance salary loan based on your credit score.
- Prepayment fact equality: One can prepay the outstanding amount, in part or full that depends on your lender. Some bank offers to pay the whole outstanding loan amount after 180 days.
Limitations of advance salary loan:
- High-interest rates: Advance salary loan carries among the high-interest rates of any loans in India. Typically speaking interest rates may vary from 15% to 21%.
- The longtime period: the greater the total cost, the longer you take to pay off the loan.
- Debt Trap: Missing payments would result in compounding penalties and interest; so one should make sure all these terms before applying for an advance salary loan.
- Over-borrowing: Borrows how much is required. Overborrowing may lead to debt.
As discussed earlier, advance salary loans are temporary loans offered for salaried professionals. Like unsecured loans, the interest rate for these loans is calculated every month or even daily. One should mainly focus on the repayment of the loan to lenders because if once the repayment cycle gets disturbed, there are chances that you have to pay more than the initial amount. It is highly advisable to opt for these loans only during emergencies when there are no other options available.