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Published On: Fri, Mar 15th, 2019

All You Need to Know About Advance Salary Loan

Have you ever come across this type of loan but are sceptical about whether you fit the eligibility criteria and whether you really need it? The term ‘advance salary’ loan is a relatively new concept but is similar to any other kind of loan.

Save money on the move and invest it into something more fun photo/ Rudy and Peter Skitterians

Here is a brief guide to understanding the advance salary loan:

When Do You Need One?

There are numerous occasions where the need for liquid cash arises unexpectedly, such as    

  • Your vehicle breaking down all of a sudden before your payday.
  • You are required to pay an advance or lump sum cash amount before you shift into a new house.
  • There has been a medical emergency that needs immediate funds.
  • It is someone’s birthday or anniversary and you must splurge in order to keep your loved ones happy.

These are just a few instances and examples of when you need money but your salary is not sufficient. While you cannot expect to wait for your next salary date to make the payments, you can certainly take a short-term loan to ease your financial stress and handle these situations with ease.

How Can You Avail the Loan?

A lot of banks and online creditors provide these kinds of loans. You will need to check with your bank and do some online research to find a good creditor. The application process is very easy for online creditors. All you need to do is apply online and fill in the required details. Following this, you will get an instant e-approval and the loan amount will be disbursed after verification of your documents.

What is the Eligibility Criteria?

With the best creditors, you must lie between 23 and 55 years of age, you must be a salaried person with a minimum monthly income of INR 15,000. However, a few creditors may have higher and more stringent eligibility criteria. Hence, you must assess your options well before choosing the right creditor.

What are the Documents Required?

This type of loan required relatively minimal documentation. Here is a list of the documents that you will need to procure at the time of application:

  • Aadhaar Card
  • Identity proof (Driving License/Voter’s ID/Passport/ or Pan card).
  • Address proof (Driving license/voters ID/Utility bill/Bank Statements).
  • Two passport-sized photographs

What Are the Interest Rates?

The interest rates are lowest for this type of loan. However, this is a variable factor and depends on the type of creditor. The lowest interest rates offered are at about 1.08% per month.

What Is the Minimum and Maximum Loan Amount?

This is again a variable factor and depends on the creditor-type. The standard maximum loan amount for this type of loan is INR 5 lakh and the standard minimum loan amount is INR 35,000.

What is the Loan Tenure Period?

The tenure for this type of loan is usually short and can range from a few days to a few months. Some creditors offer a flexible loan tenure that can be decided by the applicant. Hence, it can be anywhere between 2 months to 36 months.

Any salaried person is eligible for this type of advance salary loan. This type of loan has no charges for prepayment and due to high market competition, interest rates remain very low. This is the best option when you are in the need for quick money.

Author: Sherley Grimes

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