Financial emergencies can crop up at any time, and even though we try to stay prepared, it is impossible to prepare for every contingency. Apart from savings, it is essential to remain aware of the different sources of financial support available.
Getting a salary advance loan online can be a simple way of getting the necessary funds to tide over a difficult time. It is like a personal loan against your upcoming paycheck, which you can repay with interest as soon as you receive your next salary. Salary advance loans are quick and easy to avail of and can be a lifesaver in a difficult time.
However, a salary advance loan may only be suitable for some. Remember, getting a loan against your upcoming salary will reduce your earnings for the next month or a few months. Like any other financial instrument, this loan should also be taken after careful consideration and planning.
Here is a look at seven things you should consider before deciding to take out a salary advance loan online –
Essential Factors to Consider Before Getting a Salary Advance Loan
- What Proportion of Your Salary Do You Need? – Considering your financial needs, consider the proportion of your salary you want to devote to this loan. Remember to account for essential expenses such as rent and utility bills you must honour next month. It will help you determine the amount of salary advance loan you can afford to take out.
- Eligibility Criteria – Every lender has eligibility criteria that include minimum income, credit score, and employment status. Before applying for a loan, review the eligibility criteria of prospective lenders to ensure that your financial position fulfils the required eligibility
- Interest Rates & Lender Fees – Salary advance loans usually have higher interest rates than traditional personal loans. Also, different lenders have different interest rates and fees for salary advance loans. Ensure you compare other lenders to determine where to get a loan at the least expense.
- Loan Amount & Repayment Period – Borrowers should consider the loan amount and repayment period before applying. The loan amount should be enough to support your financial needs comfortably but not too big to repay. The repayment period should also suit your earning pattern and allow you to repay the loan comfortably without stretching your finances.
- Processing Time – In an emergency, you may need funds urgently. Choose a lender who can fulfill your funding needs on time. Suppose the lender has an extended processing period. In that case, it may be too late when your loan amount is credited to your account.
- Lender Reputation – Finding out about your lender’s reputation and the experiences of past borrowers is an essential part of researching loan options. There are various online reviews available for different lenders, lender ratings from regulatory agencies, and customer service policies that can help you understand your prospective lender’s reputation.
- Other Terms & Conditions – Every loan agreement has a list of terms and conditions that borrowers and lenders must adhere to. Read all the terms carefully and clarify your doubts beforehand. Reading the terms and conditions will help you beware of prepayment penalties, late payment fees, and other charges related to your loan.
Even though a salary advance loan online is a quick and easy way to get the funds you need in a financial emergency – it is advisable to proceed cautiously. Take a loan only when necessary. Interest rates for salary advance loans are higher than many other financial instruments, so weigh your options carefully before opting for a loan. And finally, keep up to date with all the information and read the terms and conditions carefully before deciding.
In case you need immediate funds and a salary advance is not the right option for you, you can choose quick personal loans offered by online lenders such as KreditBee to help you manage your financials. With KreditBee, you can get disbursal in just a mere 10 minutes once you apply online and your loan is approved. That’s bound to come in handy when you’re in need!
Author Bio:
Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.
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