Following are the differences between advances and loans.

A Loan is a financial assistance given with an absolute promise to repay, whereas an advance is given against the supply of goods and services.

Generally, Loan carries a rate of Interest against the financial assistance whereas an Advance does not carry such a rate of interest.

A loan can be for a long-term period whereas an advance is given for a short-term period and against work or project.

A loan is always repaid, whereas an advance is adjusted with the outstanding bill amount.

Example-Advance given to employees against the current month’s salary. A loan is given to employee for buying a Car.