Associate at a law firm
Fintech Watch
CASH CRUNCH ? NOW BORROW AGAINST YOUR SALARY
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 , finds Anagh Pal
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 .
For those who run out of cash at the end of the month , there is help at hand . A handful
Subro Sengupta , 25 , Mumbai
Associate at a law firm
Has taken a salary advance from EarlySalary several times to meet short-term cash crunch .
Prefers this over other options because of minimum paperwork and the money is credited to his account within 15 minutes . Avoids overspending on the credit card .
His recent borrowing from EarlySalary was of `28,000 to cover some medical expenses .
To repay `28,857 within 30 days .
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Outlook Money December 2017 www . outlookmoney . com