There’s no telling when a financial emergency can arise and while we often expect the best, it’s important to be able to react appropriately when things get out of hand. For salary earners, salary loans (or salary advances) are a great fallback plan when financial emergencies arise.
Today’s post will cover alternatives for getting emergency cash with a special emphasis on salary loans.
What are Salary Loans?
Salary loans are loans typically given to salaried workers or employees to meet immediate financial needs.
The loan value is often tied to the salary scale of the employee with repayments taken from future salaries. Repayment terms and interest rates will however differ between lenders.
Things to consider before applying for a salary loan
Before applying for a salary loan (or any other loan for that matter), it is important to consider some key factors such as;
1. Interest rates and fees
All loans come at some cost and while not every cost may be financial, for loans obtained from financial institutions or employers, expect some financial cost.
Ensure you know the interest rate and any other associated fees. This can save you a lot of stress during repayment.
2. Repayment terms and flexibility
Some salary loans may require full payment by your next salary while others spread repayment over months. In any case, understanding the repayment flexibility will help you decide if you should apply for that loan.
3. Application process and approval time
For a serious emergency requiring prompt response, a loan application that takes two weeks to approve may not be the best for you. Ask for the possible duration of loan approval to guide your decision-making.
4. Overall financial impact
How good are the loan terms in line with your financial goals? What are your plans for the money? Will it put considerable strain on future earnings?
Asking and answering questions are important just before signing the loan application form.
What are the sources of salary loans?
- Employers
Some employers have in-house financial assistance programs (including loans) for employees. The application and consideration may be handled through the human resources department and disbursed to the borrower’s salary account.
- Traditional banks
Most traditional banks have salary advance loan offerings for employees of reputable private and government companies or agencies. In most cases, the borrower will be required to have a functional salary account with the bank.
- Verified Lenders
There are also lenders who provide salary loans to employers. Requirements may include the borrower’s credit score, salary account history, and proof of employment among others.
Where to get a salary loan in Nigeria
There are a lot of options you can consider for getting salary loans in Nigeria. Your first stop will be to check with your employer. Bigger companies may have loan facilities for their staff which you can explore.
The next options are with traditional banks and other verified lenders. You can shop around banks and lenders to see what’s on offer but ensure you are getting the best loan terms in line with your financial goals.
One option to consider is Zedvance Finance. Zedvance offers salary loan for employers of private and public organizations in Nigeria that provides salary advances up to ₦5,000,000 with a tenure of 18 months.
You can easily apply for a Zedvance Payroll loan by visiting the Zedvance website, or by calling 0700 100 1000.
What are the requirements to receive salary loans?
Requirements for salary loans will vary depending on the source of the loans. For example, a loan from an employer may not require you to submit your employment letter. In any case, some common requirements for receiving loans are:
- Proof of employment: This can be employment letters, work ID, statement of salary bank account, etc to show that you are employed.
- Proof of residence: Borrowers may need to provide proof of their residential address, such as a utility bill or a lease agreement, to verify their current residence.
- Minimum income: Lenders may have a minimum income threshold that borrowers must meet to qualify for a salary loan. This ensures that the borrower can repay the loan.
- Age requirement: You must be at least 18 years old to apply for a salary loan.
- Valid identification: Any form of valid government-issued identification document can serve such as a driver’s license, passport, voter’s card, or national ID. Confirm from your bank or lender which ID they prefer.
- Bank account statement: Like mentioned above, banks will likely require you to have an account with them to qualify for a personal loan. Other lenders may require you to provide recent bank statements.
What are some other alternatives for getting emergency cash?
- Borrowing from friends and family
You can always consider securing emergency cash from family and friends. However, be careful to do it the right way and fulfill your promise to pay when payment is due.
Also be honest about the purpose of the loan, and your financial situation, and treat the transaction as a formal agreement.
- Loans from credit unions
Credit unions and cooperatives are also popular options for securing emergency loans when needed.
- Credit card cash advances
Where you already own one, you can borrow against our credit card. In essence, you can withdraw cash from your credit card just like you’d do with a debit card or transfer the funds to another bank account.
Credit card cash advances usually have higher interest rates and fees so ensure you consult with your issuing bank.
Conclusion
As a salary earner, it helps to know what salary advances you can easily get from your company or bank. Apart from this, you should also prepare and have all the requirements so you can easily apply for a payday loan when emergencies arise.
Salary loans are an easy way to raise quick money during emergencies. To know more about how you can access up to ₦5,000,000 with a salary loan from Zedvance, call the customer center on 07001001000.
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