Advance Salary Loan

An advance salary loan can be availed at any time in the month and paid back as instalments after actual pay from the company is credited, over a set period of time. These loans are given over a defined tenure and for amounts between Rs 5,000 to Rs 1 lakh. The approvals are quick and almost entirely online with the source of funds being a peer to peer lending model. These short term loans are also known in some parts as salary advance loans or as an early salary.

With Advance Salary Loan you will never feel the need of swiping your credit card. You get a line of credit or salary early up to 2.5 times of your net salary. Advance Salary loans are offered for short tenure of 3–12 months. They are repaid through equal monthly installments leading to no loan outstanding at the end of tenure.

The loans are given using the P2P lending model where people with excess funds can advance it to individuals in need of it. Loans are approved based on eligibility criteria like credit history, salary amount, company and current obligations. The process of approvals and disbursal is online with simple documentation. Recovery is done via the EMI route where borrowers can pay back in a month or over a period of few months. There are options to pre-close the advance salary loan as soon as you receive regular salary for the next month.

Benefits of Advance Salary Loans

1. Quick Approvals

Borrow any amount ranging from ₹5000 to ₹1, 00,000 which will be approved instantly.

2. Transparent Processes

No hidden fees, origination fees, closing fees or prepayment fees involved. Know ahead of time what your costs are.

3. Minimum Documentation

Minimum uploads on our quick online form & doorstep document pickup at your choice of place & time.

4. Flexible Payment Terms

Repay your loan with convenient EMIs. Pick a tenure that works for you ranging from 3 months to 36 months.

5. Instant disbursal

It takes as less as 24 hours from the time of application till you start using your funds.

Eligibility for availing Advance Salary Loans

• The borrower must be an Indian citizen and Resident of India
• Should be above 18 years of age and capable of entering into a legal contract as per the Indian Contract Act.
• Should have a valid Bank Account, Aadhaar Card and a valid PAN number.
• Must draw a net monthly salary.

Documents Required

• PAN Card
• Address Proof — Valid Aadhaar Card / Driving License / Voter ID / LPG Bill
• Passport size photograph
• For Salaried Person — a) Last three months’ bank statement into which salary is credited b) Form 16 / Last three months’ salary slips
• For Self-Employed Person — a) Last twelve months’ bank statement b) Last two years’ Income Tax Returns (ITR)

How to Apply for Advance Salary Loans

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 waiting 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.

Step 3: 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.

Limitations of Advance Salary Loans

Over-Borrowing

Most of those who apply for advance salary loans sometimes get overzealous in the amount that can be borrowed. They lose sight of the expenditure for which they require the loan, and decide to solve two or three finance-related problems with the same loan. This leads to requesting a larger round-figure as a loan amount (cost of expense A + expense B + expense C + round off), and getting stuck in a pit of debt.

Longer Time Period = Greater Total Cost

The longer you take to pay off the loan, the more potential problems you may face. A longer time period allows for more hiccups in your general rate of income, even the slightest dip in which could affect your repayment schedule. Missing an EMI payment means the bank will levy heavy fines and penalties which will compound to amount to a huge monthly instalment. A longer repayment schedule also means a larger eventual total cost, despite smaller monthly payments.

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