The idea of an advance salary loan may seem appealing: You’re due to get paid by the employer, but you have an urgent need and you need the money now. Should you opt for it? Here are some pros and cons:
Advantages of Advance Salary Loans
The loan against salary is typically for small amounts and is expected to be paid back within a few days or weeks, via your next paycheck. Each advance salary loan has its own policies and methods. However, the advantages of advance salary loan are:
- Low interest rates.
- You get money immediately and solve your financial problem.
- Extremely convenient and is available to you even when you have an average credit rating.
So, one can expect to payback from a paycheck advance and you are usually not likely to be turned down for a loan against salary.
Disadvantages of Advance Salary Loans
- Getting immediate and convenient money isn’t free. There is some finance recharge for these loans.
- Another offside of not being able to repay the loan on time is that your loan can get flipped, becoming a new loan with new terms and fees. With loans against salary, the amount one owes tends to rise quickly.
Alternatives to Advance Salary Loan!
Fortunately, most people in financial needs have some other options such as:
- You may not want to borrow from a friend or relative, but it’s likely to cost you very low.
- You can also contact those to whom you owe money and discuss the situation. They may agree to give you more time to pay or may set up an alternative payment schedule.
- Credit card debt can also be dangerous but can be considered. It should be among your last resort, but consider charging more onto your cards or taking out a cash advance on one. The interest rates can be steep and dangerous, too.
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