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More and more borrowers are dropping personal loans and opting for a salary advance loan in India. At the same time, many borrowers are still not sure what the latter is or how the two are different from each other. Keeping this in mind, the following article will explain what advance loans are and how they are different from your normal personal loans. So what is a salary advance loan? It’s like a personal loan only much smaller and usually goes by a number of aliases such as advance loan, early salary loan, salary advance, instant loans, etc. These loans get their name from the fact that they come with ticket sizes akin to one’s salary. Now let’s discuss how such loans are different from the usual personal loans.
As mentioned early, one of the biggest differences between personal loans and a salary advance loan in India is the loan ticket size. A personal loan usually has a minimum limit of Rs. 30,000 or more and an upper limit of Rs. 15 lakhs or more. On the other hand, advance loans come with a minimum and maximum limit of Rs. 3,000 and Rs. 2 lakh respectively.
Of course, since the ticket sizes vary so much, the usage of such loans is also very different. Borrowers mostly use a salary advance loan in India to cover smaller yet urgent needs such as month-end grocery shopping, the purchase of a gadget, unplanned travel plans, an anniversary dinner date, etc. Whereas, personal loans are usually reserved for much larger requirement such as a child’s education, the cost of a marriage in the family, etc.
This is another huge point of distinction between the two finance solutions. Though personal loans have improved in this area in leaps and bounds, it is not unknown for application to take a day or two to get approvals. As far as sanctions are concerned, they could even longer. However, with a salary advance loan in India, you can get both approvals and sanctions in a matter of minutes. If you are repeat user, then you get both approvals and sanctions in seconds.
This is another area where advance loans excel. Most lenders have mobile applications through which borrowers can apply. These allow for fully app-based processes. The application is completely paperless and you will have to scan upload and as little as 4 documents. The cherry on the cake? For a photograph, you may simply take a selfie!
Another massive point of separation is eligibility. For most personal loans, you need to have a credit score north of 750 and a minimum salary more than Rs. 25,000. However, with a salary advance loan in India, you do not need to have a credit score and you can expect approval with a minimum salary of just Rs. 18,000. So, as you can see, advance loans are better suited for those smaller financial gaps in life. We hope this article has helped you understand the difference between the two finance solutions. Good luck and happy borrowing.
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