What is salary advance (How does salary advance loan work?)
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What is salary advance (How does salary advance loan work?)
Read all about salary advance loan.
There are times when emergencies come up and will require money to solve, if you are a salary earner who gets paid at the end of every month, it can be very challenging to take care of emergencies that spring up in the middle of the month.
This is where salary advance loan comes in, it is a short term loan that is given to an employee, usually by the employer, the bank or a financial institution. This loan is usually repaid from your next salary or from repaid slowly from the next incoming salaries.
One of the advantage of this loan is that, the interest rate is usually small, which means that you can easily repay it without any hassles.
In this post, I am going to be writing all you will need to know about salary advance loan and more. Remember to leave us a comment after you finish reading and also share with your friends on social media.
Let’s get into it then…
Read my post on GTbank quick credit
What is salary advance loan?
The salary advance loan is a short term loan that is usually offered to salary earners, in order to take care of emergencies.
This loan can be repaid from your next salary, or slowly overtime from the next incoming salaries, spread over a few months. Salary advance can be offered by your employer, the bank or some financial institutions.
One of the advantage of this loan is that, the interest rate is usually small, which means that you can easily repay it without any hassles.
How does salary advance work?
If you have a salary job, your employer may offer salary advance loan to you, in case of emergencies. You will have to agree on the interest rate, the duration of payment and more.
Banks like Access bank, GTbank offer salary advance loan, i.e. if you are working with a trusted organization or if you have a salary account with them.
The amount of money you will get is usually dependent on how much you receive as salary monthly. Like for example, someone who earns 500,000 naira monthly will obviously get a higher loan possibility than someone who earns less than that.
If for example you earn 50,000 naira, and you are offered a loan of 20,000 naira, to pay 5,000 naira as interest. The principal and interest may be deducted from your next salary, or over the next 3 months/6 months, depending on the agreement.
How to apply for salary advance loan
If you want to get a salary advance loan from your bank, then you will need to contact your bank customer care to see if you are eligible for salary advance. You can also contact your employer, and inquire if salary advance is offered by the institution.
Many of these salary advance loans don’t require much documentation, all you will need to do is provide the necessary requirements, and if you meet the criteria, you will be given a loan.
Salary advance interest rates
One of the advantages of this type of loan is that the interest rate is usually subsidized. Interest on this type of loan is usually between the range of 1.33% to 4%, depending on the duration given to you for repayment.
Advantages of salary advance loan
The below are some of the advantages of salary advance loan:
- You are able to get money before you receive your salary, so you can solve problems, and resolve emergencies.
- The interest rate on this type of loan is usually small than when compared to other types of loans
- Can easily be repaid, as the money will be deducted from your next salary or slowly over the next couple of months.
- Does not require much documentation to apply for the loan
Which banks offer salary advance loans?
Read my post on the best loan apps in Nigeria
Most Nigerian banks offer salary advance loan. You can get from Access bank and also from GTbank.
Summary
With the above, you should now understand what a salary advance loan is all about, and how to apply for it.
If you need to know more, you can always contact us by visiting our contact page or you can leave us a comment below in the comment section.
Conclusion
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