Are you always short on cash as the end of the month approaches? Do you often feel embarrassed to borrow money from family and friends? Well, the salary loan might be something to consider, especially if you need money to fund emergency financial situations.
So, now you must be wondering, what are the salary loans? Basically, they are short-term loans that are offered to borrowers to bypass time until their salary arrives.
In this article, we will try to explain their use, as well as terms and conditions you should fulfill before you can submit an application.
Why do you need a salary loan?
The majority of people use salary loans to fix some emergency expenses until they get paid. It is specially designed for employed people who are trying to make ends meets. Additionally, you can use the salary loan during one-time emergencies.
For example, maybe you have booked airline tickets on the 20th of the month, and you don’t have enough money on your account. What do you do? How do you pay your airplane ticket? If you have a credit card, you can simply swipe your credit card to manage this expense. But, what if your credit card bill is due before salary, or maybe you don’t own a credit card?
Where do you get a salary loan?
When it comes to this type of transaction, there are plenty of online lenders who offer traditional salary loans. However, this is a tricky part, to get affordable loans, you need to find a reputable lender who is willing to provide you with decent interest rates.
After all, the biggest issue with salary loans is that they come with high-interest rates, and if you aren’t careful enough, you may end up in bigger debt than you were.
Who can apply?
Only people who are employed can apply for a salary loan. However, if you are self-employed, you may not be eligible for this type of loan. Pay attention to certain online lenders who do provide salary loans for specific cases. Those are usually startup lending companies that promise loans within a few minutes.
It’s hard to guess whether they can offer decent lending conditions, and you might be required to upload your bank statement, salary slips, ID, and others, to apply for a loan.
What is the interest rate?
Well, interest rates mostly depend on lending companies; however, they shouldn’t top 2.5% per month. Since salary loans are short-term short – term loans, the interest rate shouldn’t be that high. On the other hand, if you fail to meet the payments, then interest might increase.
The processing fee is another thing you should worry about, and it might be as high as 4%, and they are all paid upfront. Also, keep in mind that some lenders calculate interest on a daily basis, which can be a considerable disadvantage.Therefore, make sure you can really meet their terms and conditions before you apply for a salary loan.