Published on Jun 30, 2021Updated on Oct 7, 2026
For most of us, salary is the primary source of income, using which we fulfill our daily needs and ensure financial security. But, one of the biggest disadvantages of salary is, they are fixed, while the expenses are not.
There are times when the expenses turn out to be more than our monthly salary, and at such times, our savings can bridge the gap. But, not always, we have that kind of flexibility to depend on savings to cover for the increased expenses.
In such a situation, many choose to borrow from friends and family members or take a loan from informal moneylenders. However, such solutions prove to be quite inconvenient in the long run.
This is where Personal loans can help. There are also other forms of loans, such as a Salary Advance Loan, a form of short-term unsecured loan, which you can avail to cover the expenses. But what is the difference between an Instant salary loan and regular personal loans? Let’s discuss these products in detail.
Advance Salary Loans are curated exclusively for salaried employees and professionals who require a small amount to cover some urgent need, and which can be repaid in less than 15 months. Advance salary loans differ from personal loans in one significant aspect, i.e., the rate of interest. The rate of interest on a salary loan is calculated on a monthly basis, where as personal loan interest rates are often charged at an annual basis..
Thus, the ROI and loan terms vary from one lending institution to another. There are several lenders who process salary loans in a matter of hours, which adds to the risk. Salary loans have a relatively high APR (Annual Percentage Rate). Thus, these loans are not suitable for borrowers who need a higher amount, and a longer tenure so that the resulting EMI doesn’t strain their finances.
Must Read: How Much Personal Loan Can You Take On Your Salary?
Must Read: How to Get a Personal Loan if you have Low Salary?
Salary Advance Loans can be highly beneficial when facing a financial emergency or in urgent need of cash. However, it should be treated as an option of last resort, due to the costs involved and mismanagement can lead to over-borrowing. If you need a larger amount and would like to pay it off in easy EMIs which can conveniently fit within your budget, a personal loan is the best choice.
Important Note: This article is for general informational purposes only and may be subject to change from time to time. As product features, eligibility criteria, interest rates, charges, fees, tenures and other terms may be revised as per SMFG India Credit's policies, readers are advised to refer to the latest details from the respective product pages (please select from the top menu). For the latest loan charges, please visit Charges & Fees Link and for the latest Interest rates, please visit Interest Rate Rationale. Please note that final loan terms, disbursement process and eligibility criteria will depend on SMFG India Credit's policies at the time of loan application.
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