A salary advance is a short-term loan that you take payable on payday. Since this is a short-term loan, it might attract high-interest rates. Fortunately, there are many ways of getting salary advance loans. Before you take this loan, make sure that you compare the rates and determine the best choice for you.
How to Choose the Right Salary Advance Loan Provider
Check the interest rate when getting a salary advance loan. Some of the providers with low-interest rates are M-shwari and KCB Mpesa. Most reputable loan providers are fair when it comes to interest rates.
In case you are dealing with an emergency, you need a loan product that delivers money fast. Mobile money and digital loan providers take minutes to approve and deposit money in your account.
If you are a little bit patient and you have some days, you can opt for a Sacco loan or bank overdraft.
Reputable Loan Provider
It is advisable to consider a reputable loan provider. CRB has a list of its approved lenders so you can check them out before you go for a loan. Approved lenders are professional in their conduct and their terms are fair.
Types of Salary Advance Loans
Mobile Money loans
Kenya is leading when it comes to mobile money loans. These are short-term loans that are payable within a month. you can take the loan and pay the money on your payday.
Some of the mobile money loan providers include:
M-shwari is one of the leading mobile money providers. It is a Safaricom product that gives customers loans with an M-Pesa account. Before you qualify for an M-shwari loan you should have used your Safaricom line for at least six months.
You should also have saved some money in your M-shwari account for some time. To determine the amount you qualify for, they assess your creditworthiness and how much you transact on your M-pesa. It is one of the best mobile money loans since it has the lowest interest rate of 7.5%
M-pesa Fuliza is an overdraft service offered by Safaricom. The service allows you to send money, buy goods and pay bills when you do not have cash in your M-Pesa account.
Immediately your M-Pesa account is credited, and the money spent is automatically deducted. The service has a daily interest rate depending on how much you have borrowed. Your Fuliza limit is determined by your M-Pesa transaction history.
KCB Mpesa is offered through a collaboration between KCB Bank and Safaricom Mpesa. It offers convenient digital banking but it also allows customers to receive loans. KCB Mpesa has the most affordable loan when it comes to mobile loans.
With this platform, you can improve your creditworthiness on the platform by taking loans and paying them on time. The more you take and pay for loans, the more money you can access.
Airtel Timiza is a loan product by Airtel Money. It is not as popular as other mobile money products but it gives customers access to loan products. To qualify for this loan you need to be a regular user of Airtel money.
Hustler Fund is a loan facility by the government of Kenya. It offers loans to Kenyan Citizens and the best way is to register through the USSD code *254#. Unlike other mobile loans, they give small amounts of Ksh 500. However, it is possible to grow your loan and get higher amounts.
Digital Money Lenders
Tala is a digital money provider that provides loans to Kenyans. They use technology to access the creditworthiness of their customers. Tala offers loans up to Ksh 30,000 and they have friendly interest rates. Their loans are payable within 30 days or 21 days.
A Branch is a loan product offered by Branch International. To access the creditworthiness, they will get access to your phone and check your transaction. They offer loans that can go up to Ksh 30,000 depending on your creditworthiness and repayment period.
Timiza is a loan product by Barclays Bank. However, you do not need to be a Barclays Bank account holder to qualify for the loan. This is a digital loan so they rely on your transaction history such as Mpesa payments to determine your creditworthiness.
Zenka is one of the most popular loan platforms in Kenya. Unlike other loan products, it gives higher loan amounts and you can get up to Ksh 50,000. To determine whether you qualify for the loan, they use a special algorithm to check the data in your phone.
If you are employed, you are likely a member of a Sacco at work. With Saccos you save money from your salary and take loans from the money saved.
If you want huge amounts of money that you cannot get from other loan providers, going for a Sacco loan is the best way to go. Sacco loans are affordable although it takes some time before you are approved for the loan. It might not be the right loan to get in case of an emergency.
Salary Bank Advance Loan
You can get a salary advance from your Bank such as the KCB Salary advance. If you have a salary account, you can talk to your bank for an advance. However, you have to meet all the qualifications because banks tend to be strict.
For you to get an advance loan, they have to check your credit rating. If you have been listed in CRB, you might not get the loan because this is a big deal for banks before they approve a loan.
Salary Advance from Employer
Depending on your employer, you might get a salary advance from them on request. There are employers that allow you to take a salary advance and deduct money from your salary on payday. The amount you can take will depend on your salary.