Cash Crunch? Now Borrow Against Your Salary
Outlook Money|December 2017

In a bid to help young professionals tide over the month-end blues, a clutch of companies are offering quick loans online for short durations at 24-36 per cent per annum interest rates. 

Anagh Pal
Cash Crunch? Now Borrow Against Your Salary
All of us at some point would have faced a cash crunch, especially towards the end of the month. This could be due to several reasons—a medical emergency, car breakdown or a sudden plan for a friend’s bachelor trip. While that puts us in urgent need of cash, it could still be few days before the salary is credited.

Or let us take another scenario. Your SIPs (systematic investment plan) and EMIs (equated monthly installments) would normally be due at the start of the month. But, your salary is delayed from normal and will only come in a week later. Again, you need some cash, could be for a short period of time, but you need it immediately. What do you do in the above situations?

Way out

Today, for many young working Indians borrowing money from parents is generally the last resort. Friends can help, but they too could be in a similar situation. You may ask your employer for advance salary, but your employer may not have such a policy in place. This is one need that new age financial technology (fintech) companies are looking to address through a loan product known as ‘salary advance’. Most of these companies tie up with RBI-registered NBFCs to extend such loans.

Despite good planning, a salaried class person may face a financial challenge, especially during the middle of the month owing to some unforeseen situation. In such a case, requesting advance salary from your employer is one fitting way out. However, less than two per cent companies in India provide advance salary support to their employees.

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