Loan Tips: Advance Salary Loan or Personal Loan, which option to choose in an emergency?
Advance Salary Loan Vs Personal Loan: Emergency can come in front of anyone at any time. In such a situation, to meet the need for money, people often take personal loans or ask for money from others. But if you are a job holder, then you can choose the option of an Advance Salary Loan. Many banks and financial institutions give advance salary loans to the employed. This loan can be up to three times your salary.
One advantage of an advance salary loan is that you do not need a lot of 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 can easily get this and you can repay it in fixed intervals through EMI. However, its interest rates are much higher than personal loans. A salary loan is available at an interest rate of 24 to 30%, whereas a 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 loan limit and period are very short. In advance salary loan, you can get a loan up to three times the salary and it has to be repaid within 15 months i.e. one and a quarter years. Whereas in a personal loan, you can take a higher amount as a loan if needed and you get a maximum of five years to repay it.
Effect on the household budget
An advance salary loan helps you in difficult times, but it can mess up your household budget because due to repaying this loan in a short time and a high interest rate, its EMI becomes very high. In such a situation, saving from income can be quite difficult.
Only those who are employed can take a loan
One difference between an advance salary loan and a personal loan is that anyone can take a personal loan, but only those who are employed can take an advance salary loan. Apart from this, you do not need to mortgage anything in the personal loan, whereas, in an advance salary loan, your salary is kept as collateral.
Rules for advance salary loan
There are some rules for advance salary loans like you should have at least two years of 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.
PC Social media