If you have an itch to travel, but don’t have enough money to finance your exotic vacation, it is time to think about funding your upcoming trip through a Travel Loan or Personal Loan for Vacation.
About Travel Loan or Personal Loan for Vacation.
A travel loan is a type of personal loan intended for financing your vacation. A travel loan, like any other personal loan, is a great way to meet your short term financial requirements, in this case your holiday.
With lesser interest rates than credit cards, travel loan is a much better way to fund your holiday. Many banks and non-banking financial companies (NBFCs) are offering personal loans to cover travelling expenses.
Why should you avail of a Travel Loan?
Lower Interest Rates: Interest rates applicable on a personal loan (12% to 15%) are much lower than that on credit cards (2.5% to 3% per month).
Easy Process: The process of disbursement is very quick and hassle-free.
Flexible Repayment Tenures: You have the flexibility to choose your repayment cycle. Loan repayment tenures range from 12 to 60 months.
Collateral Free: A personal loan is an unsecured loan, which means you are not asked to pledge any collateral or security as an asset.
Important points you should bear in mind while applying for a Personal Loan for vacation.
Whether it is the right loan for you: You need to undertake proper research and find a personal loan which is right for you. People usually compare interest rates which vary from bank to bank.
However, you should also consider the processing charges, documentation charges, pre-closure charges and associated monthly fees (if any).
Don’t borrow beyond your repayment capacity: You should be able to meet the repayments on the loan in a timely manner. Your monthly loan repayment should not be more than 50% of your income.
Never miss a repayment. Delay in repayment will have a negative impact on your credit score.
Whether prepayment is allowed: Go through the repayment schedule before signing up. Some banks or financial institutions prescribe a minimum number of EMI payments that should be made before you can prepay a loan. There might be some prepayment charges associated with the loan.
The bottom line is that travelling, whether it is planned or spontaneous, could be more expensive than we estimate. If your vacation expense exceeds your budget, a personal loan can fit the bill.