Need an advance on your salary this festive season? There are startups for that.

livemint.com:

₹800 crore as salary advances, or loans against salaries, in the latest April-June quarter. Such fintech startups typically partner with non-banking financial companies for capital to disburse as advance salaries. A majority of their clients tend to be companies with a large number of contract employees or gig workers.

Repayments take various forms. In most cases, an employee availing an advance salary pays a convenience fee per transaction. The credited amount is settled in installments, adjusted against their salary over a few weeks or even up to a year.

The interest percentage on such loans range from 18% to 24%. While gig workers account for a large chunk of those seeking advances against their wages, young employees in white collar jobs too find use for such loans, although their reasons tend to not be existential. “Those in the 30-35 age bracket who earn a couple of lakhs a month are borrowing money from our platform as most of their earnings are invested in shares, gold, SIPs, etc.

Some of them take a quick loan to buy a new phone or pay for an expensive night out," said Sharma. For such companies, partnering with fintech startups such as Refyne, KarmaLife and SalarySe to provide salary advances allows them to assist their employees without having to run an internal loan scheme. “Given the low levels of savings, several (young) associates are likely to face financial shortfall, which is not just restricted to the month-end," said Kartik Narayan, chief executive-staffing, at recruitment firm TeamLease Services Ltd.