Salary Advance or Personal loan, which is the better option
SALARY ADVANCE OR PERSONAL LOAN, WHICH IS THE BETTER OPTION?
Sometimes, your monthly expenses can surpass your salary. There is always a choice of dipping into your savings to meet the needs that arise; however, even savings can fail to rescue you. That being the case, you might consider taking a personal loan or a salary advance. Both options appear similar and achieve the same goal of meeting your immediate financial needs, but why choose one over another? This article distinguishes the salary advance loan from the personal loan, and in the process, we can figure out which is the better option.
A salary advance is an unsecured loan taken against your salary. The loan is extended to salaried professionals and recovered in installments at low-interest rates. The borrower can use the loan for any purpose, such as emergency expenses, medical expenses, etc. At Elevate Credit, we call it Inua Salo.
A personal loan refers to an unsecured loan that a borrower takes to meet short-term financial needs. The eligibility criteria are pretty straightforward, with flexible payment options.
STRENGTHS OF PERSONAL LOANS.
Research by Reel Analytics about the state of digital lending in Kenya indicates that in every 100 Kenyans, 55 had acquired loans from digital lending applications or platforms. The majority of Kenyans preferred personal loans. Below are some advantages of personal loans over the salary advance loan.
Flexible loan amounts – The amount of cash available to you in a salary advance loan depends on a person’s salary, while a personal loan mainly depends on your credit score. This availability of flexible loan amounts based on an individual’s credit score can benefit clients who don’t have a formal job or their salary levels are below the requirement for a salary advance loan.
Availability – personal loans are readily available, and almost every credit company offers personal loans because of their simplicity in terms of requirements.
More versatile – Due to the flexibility and the amount offered on personal loans, they have several purposes; this can entice most people seeking urgent cash with no payslips to show the lender.
Impact on the credit score – When you take a personal loan and pay it on time, you boost your credit score much faster based on the frequency of taking the loan and repaying.
STRENGTH OF SALARY ADVANCE LOAN (INUA SALO).
Salary Advance loan is becoming popular by the day. This increased popularity can be attributed to the current inflation rate of 5.73%, reflecting the high cost of living that challenges the working population to pull through the month, depending solely on their basic salary. A fixed salary at the end of the month is supposed to guarantee financial security, but there is a possibility of facing a financial shortage. The purpose of the Inua Salo loan is to come through for you during such a time of need. The advantages of a Salary advance loan include:
Salary advance loan (Inua Salo) is more flexible – The procedure to take Inua Salo has been made quick and efficient at Elevate credit to make it hassle-free for you. The loan is applied by simply using your smartphone once you download the Elevate Credit mobile app from the Google play store. The salary advance loan is deducted from your payslips, making the repayment process more straightforward.
Rates of interest – The interest levied on personal loans depends on factors such as a good credit score with a debt-to-income ratio below 35%, which young employees may lack. The above scenario results in high-interest rates or collaterals demanded so that the young employee can secure a personal loan. Inua salo, on the other hand, charges lower interest rates and doesn’t require collateral.
Easy Repayment – The repayment tenure of an instant personal loan can be as long as five years. Non-repayment can affect your credit score and lead to the rejection of future loan applications. Inua Salo requires an MOU with your employer, which means that it will be hard to miss payments as the loan repayments will be deducted by your employer automatically from your salary.
Helping you get a decent credit score for a loan – Taking a personal loan almost certainly requires a good credit score. Most young employees cannot take loans because they don’t have a credit history and need to build it. Taking any form of credit helps boost your credit score; hence Inua Salo will also increase your credit score.
A salary advance loan helps you pay off unexpected expenses, be it hospital bills or simply money for vacation. The Inua salo benefits both the employee and the employer because it prevents junior employees from going into cash crunches from the early days of their careers. Elevate credit’s salary advance application is seamless and hassle-free with almost instant approval and quick money transfer to you. Get in touch and let us help you do more with your salary.