Early Salary vs Personal Loan: Which One Should You Choose in 2024?  

What is a Personal Loan?  

A personal loan is an unsecured loan. It allows you to borrow a sum of money from a bank or lender and the borrower can use it for various purposes like planning a trip, business, or for a dream wedding. However, the borrowed money must be repaid with an added interest charged by the lender. Since it is an unsecured loan, the lender will not seize your assets if you default on your loan payments, but it can create a negative impact on your credit score.   

What Is an Early Salary Loan?  

Early salary loans allow employees to get a part of their income before the actual payday. This policy makes the process quick and the best way to receive money for short-term expenses or emergencies. These loans are supplied by companies or some lenders without a lengthy application process, making them an excellent choice when you require cash quickly.  

In this policy, lenders calculate interest rates monthly or daily on early salary loans.  

Feature Early Salary Access Personal Loan 
Source of Funds Your earned wages Borrowed money 
Interest/Fees Flat fee  Interest rate  
Repayment Deducted from next paycheck Fixed monthly EMIs  
Credit Check Usually not required Required for approval 
Impact on Credit Score No direct impact May impact positively (if or negatively 
Typical Amount Up to 50% of net salary (e.g., ₹20,000) From ₹10,000 to a few lakhs 

As you can see the difference is that early access is a more straightforward option, but it has the limitation of the amount that you have already earned. While a Personal loan can provide you a large amount but comes with interest charges and possible credit implications.  

The decision depends on your personal needs, the amount requested, and your capacity to repay. Early salary loans can be used for temporary needs whereas personal loans may be better suited for larger expenses.  

Benefits of Early Salary: 

Flexibility to opt for salary advance:  

When it comes to loans, the transaction process takes more time, and a lot of paperwork might come to your mind. But in the early salary option, the lender gives the required amount in a short duration with less paperwork compared to a personal loan

Quick and easy repayments:  

Early salary loan gives you flexible repayment options which are designed to repay your debt in single installments, usually on your next payday. This makes easy and flexible repayments for the borrower and not to worry about having multiple repayments scheduled.  

No Collateral Required:  

Mostly secure loans come with collateral, early salary loans are unsecured and do not come with assets as security. This reduces the risk of losing their assets in case of default and makes the borrower who may not have valuable collateral more beneficial.  

Advantages of Personal Loan Over Salary Advance Loan: 

Higher Loan Amount:  

Personal Loans have higher borrowing limits when compared to early salary loans, providing more financial stability for the borrower when there are major life events or emergencies.  

Offer Flexibility:  

Personal loans offer flexibility to use the borrowed money for various needs such as integrating existing debts and making higher tenure (60 months) which makes it the borrower to repay. In an Early salary loan, the tenure is limited to 12 months  

Build Credit Score:  

Responsibly managing and repaying a personal loan can improve your credit score over time, enhancing your creditworthiness. This can provide a long-term benefit by strengthening your credit profile, potentially helping you secure better terms when applying for future loans or other forms of credit.  

Lower Interest Rate: 

When compared to salary advance loans, personal loans often have lower interest rates, which can significantly reduce the overall cost of borrowing, making them a more practical and cost-effective solution for long-term finance needs.  


In conclusion, both personal loans and early salary loans depend upon the borrower’s specific demands and circumstances. Early salary loan provides the borrower Instant access to a section of their pay for pressing needs, but personal loan offers a large amount and more flexible options for finances.  Personal loans offer greater versatility in terms of how the funds can be utilized.

Zap Money offers personal loans with reasonable interest rates and flexible repayment periods. Ultimately, each loan helps serve a different purpose and may be appropriate for a variety of financial situations. 


Does a personal loan hurt your credit?

Is early salary RBI approved? 

What is the early salary policy? 

What is the age limit for an early loan? 

Does early salary charge interest? 

Hariharan Ravichandran

Understanding the ever-changing environment of money may be a difficult experience.I'm Hariharan, a seasoned finance explorer and blogger. I am right there with you, beginning on this journey of financial enlightenment as a fellow traveler.


The ZapMoney app makes personal finance easy, accessible, and affordable. The App is available on Google Play Store and App Store for download, allowing you to sign up and access easy personal loans. ZapMoney is powered by Monexo Fintech Private Limited which is a registered NBFC-P2P.
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