Salary-advance and app-based short term loans disburse within hours but their effective annual cost routinely crosses 24–36% once processing fees are counted. Used once, for a genuine bridge, that can still be rational; used monthly, it is a debt treadmill. If the gap repeats every month, the honest fix is a limit-based product like an overdraft — or the budget itself.
Before you borrow
- Compare the total payable, not the EMI — a longer tenure always looks cheaper monthly and costs more overall
- Check the processing fee, typically 1% to 3%, which is deducted before the money reaches you
- Ask whether prepayment is allowed and what it costs, since most personal loans are fixed rate
Run your numbers in the EMI calculator before you commit to anything.