Introduction to Salary Advance:
Premature withdrawals from FDs may not be enough to cover expenses during a financial emergency. You can get the money you need from a salary advance loan before your next paycheck is due to cover your expenses.
A short-term loan from your employer, often intended for salaried employees in India, is known as a salary advance. Some lenders charge a reduced interest rate that is calculated monthly or perhaps even daily. The interest rate and other loan terms, however, differ from lender to lender.
You have the option of deducting the entire salary advance payment amount at once or in installments over the following few months or years. A salary advance loan typically has a number of guidelines and limitations. However, they are perfect for those who want to pay back the loan quickly.
How does Salary Advance work?
A salary advance is a legitimate loan where repayment is made by the company withholding money from the employee’s future paychecks. Furthermore, an advance salary is an agreement between a company and employee that allows them to split a future salary before your monthly payday.
You can deduct the entire repayment from one salary check or a smaller sum from numerous upcoming paychecks.
In addition to privately owned businesses, a number of financial institutions and NBFCs provide advance salary loans to salaried people at a low interest rate. You can use your advance income to cover expenses for travel, tuition, utilities, credit card debt, and other unforeseen medical crises. Young paid workers who are struggling financially towards the end of the month are increasingly requesting advance salaries. Furthermore, receiving a salary in advance has many advantages.
Why do you need a Salary Advance?
Sudden Medical Emergency:
You or a member of your family could develop a sudden illness or injury, necessitating financial support for treatment. You can get an immediate salary advance if you think your pay won’t be enough to cover your needs.
House Rent:
Let’s say you find a rental home, but you must first pay a deposit. You can choose to receive the house on rent rather than having to let it go by choosing an advance salary loan.
Utility Bills:
Paying your utility bills could be necessary to prevent disconnections and other issues. An advance salary can be useful if your bill payment deadline is drawing near.
Children’s School Expenses:
Even though you may have budgeted for paying your children’s tuition, unforeseen costs could put you in financial trouble. Your children’s education expenses may be covered by advance salary loans.
Vehicle Repairs:
You must get your vehicle fixed right away if it breaks down without notice since you may not be able to get to work. You can use the advance salary loan at this time.
Other unforeseen expenses:
If your wage only allows you to cover the bills that are budgeted, there may be other unanticipated costs that crop up at any time, therefore you’ll need extra money for emergencies. When you need money for an emergency, a salary advance loan can come in handy, and you can apply for one if you find yourself in this situation.
Benefits:
No Collateral:
In contrast to a personal loan, a salary advance loan can be acquired without any guarantee or security.
Affordable Interest rate:
Low interest rates are charged for salary advances. Only the money that is withdrawn is subject to the company’s interest rate.
Quick Disbursal:
With paperless verification, salary advances are substantially quicker and promptly deposited into your bank account. The time spent verifying physical papers is greatly reduced as a result.
Flexible Repayment Tenure:
Unlike salary advance loans, which have an easy and flexible repayment plan, traditional personal loans have rigid payment deadlines. Most of the time, the repayment period is brief—between 6 and 24 months.
Documents required:
Recent and coloured photograph
Identity proof – any one document from PAN Card, Aadhaar card, Voter’s ID Card, driving license, passport, etc.
Age proof – any one document from PAN Card, Voter’s ID Card, Aadhaar Card, passport, driving license, etc.
Income proof – salary slips or financial statements of your business
Address proof – any one document from Aadhaar card, Voter’s ID card, driving license, passport, utility bills, etc.
Bank statements for the last 3-6 months
Eligibility Criteria:
Age: Loan applicants must be at least 18 years old and up to 25 years old, with a maximum age of 65 years. It may differ from one lender to the next.
Occupation: To qualify for the loan, you must work a salaried job or be a self-employed professional or businessperson.
Income: To make it simple to repay the loan, you should have a reliable source of income. A minimum income requirement exists and is determined by the lender.
Credit Rating: For a hassle-free loan approval, your credit score should preferably be greater than 650.
Additional links:
We hope you enjoyed reading this blog. Do check out our other blogs and articles as well.
https://fatakpay.com/blog/different-types-of-investments/
https://www.linkedin.com/pulse/rise-fintech-its-impact-traditional-financial-institutions-fatakpay/
https://www.linkedin.com/pulse/budget-2023-simplified-fatakpay/
https://fatakpay.com/blog/need-for-financial-security-in-todays-inflation-recession-economy/
About FatakPay:
FatakPay provides virtual credit facilities for all. It’s available on your phone and caters to your everyday needs in both online and offline formats. Payments are done seamlessly through UPI/QR codes. The solution provides an almost zero cost, free, quick, transparent and secure way to transact in a multilingual format with a Scan Now, Pay Later facility and easy repayment options.
Link to FatakPay App: https://play.google.com/store/apps/details?id=com.fatakpay
Link to the Website: https://fatakpay.com/
