Do you have plans to travel during vacations but are stressed about funds? Are you planning to postpone your travel plans due to a paucity of funds? You don’t have to take such an extreme step of postponing your vacations because of the fund crunch. Today, personal loan for travel is an ideal choice for people who are struggling to secure money to meet the expenses.
What Is a Travel Loan?
Travel loans are a kind of personal loan for travel that covers all the expenses of an applicant during his/her holiday trip. These are unsecured loans and are paid back in instalments over a specified timeline. Whether it is a planned holiday trip or last-minute travel plans with friends or family, travel loans help meet all the fund requirements. A travel loan can be used for:
Food and beverages expenses
Travel tickets(airfare/railfare)
Accommodation at any hotel/resort
Sightseeing costs
Shopping
Miscellaneous expenses
What Are the Options to Finance Travel Loans?
An applicant can avail different options to arrange travel loans that include:
Personal loans
All financial institutions, including banks, NBFCs, and digital companies, offer personal loans to eligible customers. These loans are unsecured, and the interest rate charged vary between 11% to 20%, depending upon the lenders. The processing fees are usually between 1% to 3%. The interest rates levied on personal loans are typically low in comparison to credit card loans.
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Credit card
A traveller can use his/her credit card to pay for travel expenses. Any outstanding amount can be converted to a Credit card loan(EMI). However, the interest charged on credit card loans is higher than the personal loans for travel. The repayment tenure for a credit card loan is usually three months to 12 months, and the interest rate is between 24% to 36%.
What are the things to be wary of before taking a travel loan?
Do not overspend
In your excitement to travel with loved ones, do not take more loans than necessary. The loans, along with interest, are to be paid back and must not wreak havoc on your financial planning. Try to use the money in hand and only required funds to be taken on loan.
Destination selection
Before embarking on your journey, do thorough research of your destination and, if possible, book your tickets in advance. Last-minute bookings may be costly.
Make a rough estimate.
Try to get a rough estimate of your daily expenses during the trip. It must include all necessary activities like food, sightseeing, etc. Keep 20% more money from your final estimate as miscellaneous costs can happen.
Also Read: Traveling Alone: Practical Tips for Your Trip
Benefits of Availing Travel Loan From Fintech Companies
Unlike banks, the fintech companies are new to the credit finance business. These companies use the digital medium to cater to customers. Some of the benefits to avail of travel loans from digital platforms are:
An applicant can receive funds instantly without hassle. The loan amount can be between Rs.5000 to Rs.5 lakh.
Prompt loan approval by companies and subsequent money transfer to the applicant’s account is another positive.
The documents required for verification(KYC) can be directly uploaded, so no need for physical submission.
Affordable EMI plans to suit the financial viability of the borrower. The auto-reminder facility ensures no delay in instalment submission.
Even applicant’s with zero credit history or low credit score can avail the loan.
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Documents Required to Avail of a Travel Loan
Identity proof – Aadhar card, Voter ID, Ration card, Passport, PAN card
Address proof – Ration card, Utility bills, Aadhar card
Photos – two passport size photos
Income proof – Bank statements for the last three months
Exploring the unexplored and making fond memories for life is what travelling is all about. It is a great way to make family bonds stronger. But what if you don’t have the necessary funds to undertake a vacation? Personal loans for travel is just the right way to get the funds and travel to exotic locations without worry.
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