If you’re a salaried worker facing urgent financial needs, consider a salary advance as a solution in Nigeria. By banking with the right institution and working in a suitable establishment, you qualify for a short-term loan known as a salary advance.
What is Salary Advance Loan
This type of loan comes with favourable interest rates and repayment terms. You can choose to repay it monthly or every three months.
A salary advance allows you to borrow money from your future paycheck, enabling you to address emergency expenses and pay it back when you receive your salary.
Similar to other loans, salary advances involve a repayment schedule, interest charges, and potential fees. In Nigeria, most salary advance loans are repaid on the next payday, with the full amount, including interest and fees, deducted from your paycheck. Some may offer extended payment options over several months.
It’s essential to note that a salary advance is distinct from payday loans, despite their similar-sounding names. They differ in nature, and while some lenders may use the terms interchangeably, understanding the distinctions is crucial.
Advantages of Salary Advance
Here are the benefits you will enjoy when you get a salary advance loan
Continuity and Availability
The facility is ongoing and readily available for various purposes, eliminating the need to renegotiate for each financial need.
Predictable Monthly Payments:
Fixed monthly payments cover both principal and interest, providing borrowers with a clear understanding of their monthly commitment.
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Predictable Monthly Payments
Fixed monthly payments cover both principal and interest, providing borrowers with a clear understanding of their monthly commitment.
Cost-Effective Borrowing
The cost of borrowing is lower compared to most instalment finance options. In some cases, unused borrowing facilities generate interest in a savings account.
Convenience and Flexibility:
Offers more convenience and flexibility in procedures, as well as variable amounts and interest rates compared to traditional loans.
Convenience and Flexibility
Offers more convenience and flexibility in procedures, as well as variable amounts and interest rates compared to traditional loans.
Deduction from Payslips
Repayment is deducted from future payslips, simplifying the process and eliminating the need to save separately for repayment.
Ideal for Unexpected Emergencies
Provides a better option than regular loans for unexpected emergencies, helping with sudden expenses like medical bills or unplanned vacations.
Support for Long-Term Plans
Facilitates long-term plans such as home or car purchases by offering assistance in handling large and unforeseen financial obligations.
Easy Repayment Alignment
Repayment schedules are aligned with payday, avoiding the challenges of strict payment dates associated with traditional loans.
Quick Disbursal
Offers faster disbursal due to the pre-existing documentation available through the borrower’s employer.
Low-Interest Rates
Features low-interest rates, preventing additional financial strain. Interest is typically applied only to the utilised amount, differing from the platform where interest accumulates upon disbursement.
How To Apply For Salary Advance Loan
To obtain a Salary Advance in Nigeria, follow these steps:
Check Eligibility
Ensure you meet the eligibility criteria, typically relying on your previous payroll and employment records.
Understand Terms and Conditions
Familiarise yourself with the terms and conditions associated with salary advances, including repayment options and any restrictions imposed by your employer.
Understand Terms and Conditions
Familiarise yourself with the terms and conditions associated with salary advances, including repayment options and any restrictions imposed by your employer.
Seek Employer Approval
Obtain permission from your employer, as a salary advance requires their approval. Some companies may have specific conditions under which they will authorise an advance.
Submit Request
Submit a formal request for a salary advance to your employer, providing any required documentation or information.
Wait for Approval
Await approval from your employer. The processing time may vary, but salary advances are typically quicker to disburse due to the existing employment records.
Review Repayment Options
Understand the repayment options available to you, whether it’s a deduction from your next paycheck or spread over an agreed-upon time frame.
Remember that the availability and terms of salary advances may vary between companies, so it’s essential to communicate with your employer and adhere to their specific procedures.
Banks In Nigeria That Can Give You Salary Advance Loan
Salary advances, unlike typical loans, involve collaboration between banks and businesses to provide employees with early access to their salaries. Here are examples from different banks:
First Bank – FirstAdvance
Digital lending solution for First Bank customers.
Available to salary earners with accounts at the bank for the last six months.
Access up to 50% of the net average three months’ salary, subject to deductions for existing loan obligations.
GTBank – Salary Advance
Employees of private companies and government agencies with active salary accounts in GTBank can get up to 50% of their net monthly salary.
No collateral required, and the loan has a 30-day tenor.
Minimum salary requirements: ₦25,000 for the public sector and ₦50,000 for private sector employees.
Stanbic IBTC – Salary Advance
A revolving loan providing flexible access to funds without reapplying.
Borrowers need to repay 15% of the loan and must have their salary accounts domiciled with Stanbic IBTC.
Minimum monthly salary of N40,000 required, and employment with the same employer for at least six months.
Conclusion
Salary advance loans, offered by banks like First Bank, GTBank, and Stanbic IBTC, provide quick access to funds for employees in need.