If you're a salaried professional, you'll know how common it is to be inundated with several unforeseen expenses almost every month. This is apart from the costs that you budget for at the beginning of every month. It can be pretty frustrating in such a scenario if you don't have a cash buffer to meet such ad-hoc expenses. Dipping into your savings is also a bad idea because using it for unforeseen expenses will unnecessarily deplete it over time. Even if you leave out sudden expenses for a moment, what if you run out of money for existing financial needs or significant purchases? Taking out a personal loan is your best option. Financial institutions provide a personal loan to working professionals without requiring any security or collateral in exchange. That's why it's also called an unsecured loan. They are also known as salary-based loans or salary advance loans because you're borrowing against your salary. A few lenders also provide these loans to their customers with their own app for advance salary. Here are four benefits of these loans:
1. Access to Higher Ticket Sizes
Salary-based loans offer you easy access to higher ticket sizes in a straightforward manner. Based on your monthly salary and personal loan provider, you can avail of a salary-based loan of up to ₹40 Lakhs! Of course, whether you will be granted such a significant amount is a different question altogether. It depends on your credit score, past repayment history, monthly income, and personal loan provider. The point here is that such loans make it easy to take care of high-ticket expenses like a vacation, wedding, or financing higher-education plans. Suppose you have to undergo expensive emergency surgery. In that case, a salary-based loan will help you out here as well.
2. No Collateral Requirements
When you avail of a salary-based loan to take care of financial emergencies, you don't have to worry about arranging security or collateral. This is quite a relief, especially for those applicants who didn't have anything to put up as collateral in the first place. It's also incredibly frustrating when a lender rejects your personal loan application, just because you couldn’t meet the collateral requirements (while everything else was in place). You don’t have to worry about such a scenario if you’re applying via a salary loan app. You just have to focus on building your credit score and submitting a complete loan application with all your documentation in place.
3. Flexibility in Usage
Another advantage that comes with availing of a salary-based loan is the flexibility in usage. You can use it to meet various needs, and there's no restriction on how you can use the loan amount. This is a welcome benefit compared to automobile or home loans, where the funds are earmarked for specific purposes like buying a vehicle or a house. So, if you need to avail of a loan that has nothing to do with purchasing a home or a car, then a salary-based loan is your best bet. Once your loan application is approved, you will receive the loan amount directly into your bank account within a few hours. Suppose you're a repeat customer and already have a relationship with your lender. In that case, you may receive the funds even faster.
4. Flexible Repayment Tenures
The loan amount and repayment tenure you can avail of differs from lender to lender. Generally, while borrowing via salary loan apps, your repayment tenure can range from 12 to 60 months. You can select the loan tenure based on your repayment capacity and pay your loan EMIs on time. Try to keep the repayment tenure as short as possible so that you spend less money on interest payments.
The points mentioned above will give you a fair idea about the benefits of applying for a salary-based loan to meet various financial needs. Just ensure you borrow adequately and set your loan repayment tenure flexibly enough so that you don't miss a single EMI. If you're looking to get a salary-based loan, KreditBee is a salary loan app you can consider. Our entire loan application process is quick and completely online on the KreditBee mobile app, from profile creation to disbursal. You just need to download the app from Google Play, complete your profile, and relax. If you wish to learn more about our small personal loans, please write to us at [email protected]