Advance Salary is paying an employee a portion of his salary in advance. For example ?Çô If an employee has a medical emergency and is in need for his salary of February in advance then the employer can pay him a portion of his salary beforehand. The advances are recovered in installments and are usually interest-free.
Loan on the other hand is providing a loan at a concessional interest rate as opposed to market rate of interest. The loan could be of larger amount and could be of various types such as house loans, vehicle loans or education loans. Thus the difference between the concessional rate of interest and market rate can provide a huge relief to employees seeking a loan.