EarlySalary, as the name suggests, is a platform that deals with lending domain of fintech. Feeling the crunch in the middle of the month? While I do not advocate taking personal loans just because you wanted to buy a new phone or may be go to a randomly planned vacation, in case of an emergency, platforms like these can be really handy. The dreaded month end woes remain a general trend across income classes despite having a steady job.
The founders Akshay Mehrotra and Ashish Goyal validated this gap by talking to 100s of professionals across industries in Cafeterias, IT Parks and Coffee Shops. Once they realized that situation was more or less similar for every individual as the month end drew nearer, EarlySalary was born.
The USP
At this point, you might be thinking, why not use a credit card instead of all this? To an extent you are right. But getting hold of a credit card is still a privilege rather than a necessity in our nation. For reference, get this fact straight:
Against a debit card penetration of about 850mn, credit card disbursement stands at only 57mn as on December 2020.
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Now you know why there would be a demand for a product like EarlySalary. However, market size alone was not the only reason behind the success of EarlyStory. It was indeed their focus on digital ever since it’s inception.
We all know that even if you are eligible, borrowing is a tedious task. There is tons of documentation, approvals, calls, verifications on your road to getting the money. EarlySalary tries to eliminate this by reducing the human intervention to the maximum possible extent. Hence, making the process quicker, seamless and easy.
As an excerpt from Yourstory quotes,
“Building the app was the easier part. This was followed by building the risk engine, loan origination, and loan management backend. This was the complex task as the team wanted to reach a fair amount of automation to allow a customer to get on-boarded via a mobile app, without human intervention, get a seamless loan, and log back in any time. “
As EarlySalary evolved, the teams and process became better and stronger. The team was able to introduce seamless real-time zero human intervention-based salary advances and loans.
Journey So Far:
- This Pune based startup is funded and has raised $33.3mn till date in three rounds.
- The overall team size of the company is between 101-250.
- EarlySalary acquired another fintech platform called Cash Care in 2018.
- There are a total of 6 investors in the company so far.
Source of the above information is Crunchbase.
EarlySalary Vs Credit Card?
Time to address the elephant in the room. You love the cause and how it helps people in need from going broke. But is there any real merit in using the service? And obviously, you didn’t come this far just to know about a lending platform. So here it comes. Some points that will help you take a decision on weather to go for an option like EarlySalary vs a credit card.
1. What Type of Spender are you?
Let’s be honest. We all know, our emotions overpower our logic when it comes to taking some financial decisions. If you see that happening more than often with you, you are better off without a credit card and EarlySalary both. As a thumb rule:
While purchasing something, check if you could have purchased it even if you didn’t have access to credit. If the answer is no, you already know.
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Now, let’s assume that you have your spending in control. What option to chose in that case? The factors below will help you decide.
2. Loan Amount:
If you are planning to borrow for an amount which would cover certain regular expenses that come up every month, it’s better to do it using a credit card. Credit cards offer a repayment period of up to 40 days. In that process you end up making some loyalty points as well. This option is NOT available with a solution like EarlySalary. Your interest starts from the day of borrowing the money.
On the other hand, if you have planned a bigger expense and are thinking to fund it with a loan, a cash equivalent like EarlySalary would be a better option. The sole reason behind it being the rates of interest. EarlySalary provides interest rates from 1.5%-2% per month. On the other hand CC rates vary from 3%-4% per month.
3. Time of Repayment:
Once again, if you are taking a loan for a longer duration, EarlySalary could be a better option because of lucrative interest rates. If the loan repayment is more than 3 months, you would actually end up saving a significant chunk by opting in for a cash equivalent rather than credit cards.
4. Offer in Hand:
Don’t forget to evaluate the offers (if any) on the product you aim to buy. Currently many e-commerce players tie up with certain banks to provide a cash discount on their products. If such an offer is not available on likes of EarlySalary, it is a no brainer to go ahead with your Credit Card.
5. Eligibility:
While banks gauge the credit worthiness using only the CIBIL rating of an individual, chances of rejection are higher. If you fall in such a category, giving the likes on EarlySalary a shot is a good alternative.
Conclusion:
There’s a lot of social stigma around borrowing in our country. Hence, penetration is quite low, specially in certain sections of the society. However, with virtual documentation, faceless approvals, rise of internet, we can see the scenario changing. EarlySalary is leading this change as of now in lending space meant for salaried individuals.
Have you ever used such a service before?
Got questions? Want to take it to the next level? Reach out to me using your preferred platform from the links below
Until next time..
This Blogpost is in association with Blogchatter’s #BlogchatterA2ZChallenge
