For a lot of students fresh out of college plunging straight into the work environment, it can be understandably difficult to keep up with all the added expenses. Employees often find themselves either borrowing money from home or living a very frugal lifestyle towards the end of the month. This isn’t very uncommon – setting yourself up in a new city can require a lot of extra cash and this is where the concept of a salary advance would really help. But it isn’t just relocation that can render you short on cash – salary advances can prove useful in a variety of other situations. In case it wasn’t obvious – a salary advance involves paying an employee a part of his pay in advance and covering it up in later installments.
#1 Convenience and flexibility
It is no secret that sanctioning a loan from a bank is no small task. A salary advance is much more convenient with its procedures, and is flexible with the amount and interest rates as compared to a loan. In most cases, the salary advance is deducted from future pay-slips which makes the repayment easier. You don’t need to save up the money separately for the repayment of the advance. You can also borrow any amount – it need not be a very hefty sum, which can be paid off by the succeeding month itself. Apps like EarlySalary have a dynamic borrowing limit, allowing separate limits for all kinds of expenditure. So the salary advance does not require immense or detailed planning.
#2 Unexpected Emergencies
Not everything is predictable. A sudden sickness or hospitalisation can throw our expenses off-track. During such times, instead of breaking into fixed deposits or taking an emergency loan with a high interest rate, a salary advance can seem like a far better option. This helps avoid huge expenditure cuts in the future. In fact, the money need not be used only for emergency cases. A salary advance can help you get started even on long term plans such as buying a house or a car. A salary advance helps you pay off a large and sudden amount of money, be it hospital bills, credit card bills, or money for a vacation.
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#3 Easy repayment
A traditional personal loan from a bank often comes with strict and stringent payment dates regulated by the bank. The lack of money at such times often results in higher EMIs (equal monthly installments) with every succeeding defaulted month. Salary advances, on the other hand, have an easy repayment scheme. More often than not they are directly deducted from your pay cheque itself. If not, the repayment schemes are aligned with the payday to avoid any lack of cash during the repayment period.
#4 Quick disbursal
Contrary to the practice at banks, salary advances do not require much time and are not a tedious job. The weeks of paperwork and the time taken to sanction and get loans approved takes a long time, and hence may not be the best idea when you are in urgent need of some cash. Salary advances are much quicker since it basically gets rid of any work with a middleman. There are lots of apps available today which help with securing a Salary advancement.
#5 Low interest rates
Salary advances have very little interest rates. This helps avoiding and piling on to the already existing cash crunch that you may have. Salary advances also levy interest rates only on the money that is drawn and used, as opposed to banks where the interest is levied on the accumulated amount as soon as it is disbursed.
Salary advances benefit both, the employer and the employee and prevents employees from going into any cash crunches from their early days of employment. Salary advance applications are making the process more seamless and hassle free with their instant approval and quick cash transfer. At EarlySalary, all the benefits of a salary advance are rolled up in two one nice package – with merchant integrations (such as Amazon and schools) in-built to make the process faster and more convenient. Get started here!
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