Payday Loans

Payday Loans have no standard definition. They are also known as cash loans or short term personal loans. In the West, Payday Loans are typically short-term loans that you need to repay in full, along with the interest and associated charges, in a few weeks – when you get your next pay cheque (salary). In India, Payday Loans are your usual short term personal loans for salaried consumers – but of smaller amount (lesser than Rs 1 lakh) for short tenures (less than a year).

Do note that while these loans are easier to avail, it may lead to a debt trap since they usually come with high interest rates, high fees and charges along with short payment terms.

Payday Loans come with less stringent eligibility criteria and are usually available also to borrowers with no credit history. The only criteria that’s considered is a stable income source and hence, it is generally offered to salaried consumers. These loans are reported to the credit bureaus and hence, they can be an apt choice to begin your credit journey, provided you display good credit behaviour and repay the loan with discipline.

While Payday Loans are usually offered by new-age NBFCs, Kotak Mahindra Bank has also started
offering these loans to existing bank consumers who have a salaried account at Kotak.

Payday Loan from Kotak Mahindra Bank

Instant Cash Loans from Fibe (formerly known as EarlySalary)

Instant Personal Loan from KreditBee:

Everyday Loans from CASHe:

SMFG India Credit:

Personal Loans: If you have a need of higher loan amount (over Rs 50,000), you should check all personal loan offers available to you, including Banks where you have an existing relationship.

Banks usually offer personal loans at a lower rate of interest. The actual offer and interest rate would, however, depend on many factors including your credit profile.

Loan Against Credit Card: If you have a credit card, you can check for offers of a loan against your credit card. This is usually available to consumers with good credit history and low credit utilisation ratio. The amount is disbursed instantly and blocked against your credit limit.

Secured Loans like Gold Loan, Loan Against Car, Top-up home loan (in case if you have an active home loan) can also be strong alternatives, particularly since they have a lower rate of interest and more relaxed eligibility conditions.