Advance Salary Loan or Personal Loan, which option to choose in an emergency? Click to know their pros and cons
Advance Salary Loan Vs Personal Loan: One advantage of an advance salary loan is that you do not need much paperwork, loan can be easily taken by following some conditions. However many experts consider the option of a personal loan to be better. Know the pros and cons of both.
Advance Salary Loan Vs Personal Loan: Emergencies can come in front of anyone at any time. In such a situation, to fulfill the need for money, people often take personal loans or ask for money from others. But if you are employed, then you can choose the option of an Advance Salary Loan. Many banks and financial institutions give advance salary loans to employed people. This loan can be up to three times your salary.
One advantage of an advance salary loan is that you do not need to do much paperwork, loan can be easily taken by following some conditions. However many experts believe that if you have to choose between a personal loan or an advance salary loan, then you should choose a personal loan. This can prove to be a better option in many cases. Know how here!
Difference between personal loan and advance salary loan
An advance salary loan is also like a personal loan in a way. You get it easily and you can repay it in fixed intervals through EMI. But its interest rates are much higher than personal loan. Salary loan is available at an interest rate of 24 to 30%, whereas personal loan can also be available at an interest rate of 14 to 18%.
Loan limit and repayment period
The interest rate in this is high but both the limit and period of the loan are very short. In advance salary loan, you can get a loan up to three times your salary and it has to be repaid within 15 months i.e. one and a quarter years. Whereas in personal loan, you can take a higher amount as loan if needed and you get a maximum of five years to repay it.
Effect on household budget
Advance salary loan definitely helps you in difficult times, but it can mess up your household budget because due to repaying this loan in a short time and high interest rate, its EMI becomes very high. In such a situation, saving from income can also be very difficult.
Only employed people can take loan
One difference between advance salary loan and personal loan is that anyone can take personal loan, but only those who are employed can take advance salary loan. Apart from this, you do not need to mortgage anything in personal loan, whereas in advance salary loan, your salary is kept as collateral.
Advance Salary Loan Rules
There are some rules for advance salary loan like you should have at least two years of working experience. Apart from this, you should have completed at least one year of work in the organization where you are working. Apart from this, your age should be between 21 years to 60 years. Also, your credit score should also be good.
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