3 Advantages of Taking a Salary – Based Loan

Today, there are many reasons why you would require a loan. For young salaried professionals, managing both their work life and personal life itself can be really hard on their finances. Many people may require a loan for a number of reasons. They may need money to meet sudden expenses or emergencies, pay off short-term debts, make EMI payments, or even (and this is the most common one) tide over a cash crunch towards the end of the month. Of course, all these reasons are valid for taking out a personal loan. However, banks and other financial institutions also have eligibility criteria which you need to fulfill for your loan application to even be considered.

In such a situation, a salary – based loan, more commonly known as a salary advance, is a great alternative to a personal loan. Not only is it cheaper, but it is also a less risky borrowing option. While not many companies in India have this facility for their employees, it is a great employee benefit to have. Here are three advantages of taking a salary-based loan. Read on:

1. You Save on Interest Payments

When you take out a salary advance, the good thing is that the terms and conditions are set by your employer. You can ask any doubts you may have over the terms and conditions of the advance to them upfront, like the interest and processing fees, if any. With a salary-based loan, there is a chance that you may not be charged any interest if it is a small amount. This, of course, is not the case when it comes to personal loans, which always have a rate of interest that you have to pay. Then again, not all companies who provide salary advances give them interest-free.

2. You Have an Alternate Source of Funds

While taking out a personal loan has become extremely easy today, there is no guarantee that your application for one will be approved instantly. There are a lot of factors that banks and other lenders consider before doing so. In such a situation, if your company offers you the facility of a salary advance, it means that they literally have your back when it comes to helping you out financially. This eliminates worry to a large extent, because the next time you need an urgent loan, you can just borrow against your salary, instead of seeking out banks and other personal loan providers.

3. You Save Time and Effort

This is another advantage you get when you opt for a salary advance over a personal loan. Since salary advances are approved by your employer, there is very little physical documentation involved. There is no submission of KYC documents because it is an advance on your salary. All you need to do is talk to the officers who handle payroll and your HR manager so that the two of you are on the same page when it comes to your repayment tenure and the maturity of your salary advance.

Wrap Up

The above points are three advantages that come with borrowing salary advances. If your company doesn’t offer you this benefit, but you could really use one, don’t worry. KreditBee is a Salary Advance provider you can check out. All you need to do is download the KreditBee app, complete your profile, and leave the rest to us. You can avail up to 100% of your take-home salary as a salary advance, with no physical documentation required. If you wish to learn more about our salary advance product, write to us at [email protected] or simply call +080 44 292 200.