Your Guide to Choose a Travel Loan Carefully
Last Updated : March 25, 2016, 11:35 a.m.
Today, every individual leads a busy lifestyle. Long working hours and stress have become a part of everyone's life. But, for some planning or going on a family holiday is the only best way to handle the stress in life. Going on holidays has become an important medium of maintaining peace and happiness in one's life. However, whether you look out for a thrilling adventure trip, snow-filled skiing vacation or rejuvenating beach-side getaway, it would not be wrong to say that the annual escape from reality has become a big financial drain for many.
So, if your budget does not allow you to accommodate that dream holiday that you have been planning from so long, don't worry as travel loan is here to fulfill all your desires.
Things to Consider While Applying for Travel Loan
While borrowing money for travelling, one of the most important things that you should pay attention is-how much money you will need for travelling purpose. If your requirement is only a small loan amount, it might be worthy for you to consider a low rate credit card so as to have the extra flexibility.
However, if this is the only option left with you or it is not possible for you to put a break on spending more than necessary, you need a travel loan for sure. These days, various renowned banks or lenders have tastefully designed specific travel packages for all the travelers around the world so as to provide them with the best travel loan deal. No matter what is your favorite destination, you can avail a travel loan for that with the help of packages designed by the banks along with additional benefits. Not only this, in order to meet all your travelling needs, many lenders also provide you with the personal loan for travel. Yes, you can apply for personal loan with them at any time, and cover all your travel expenses with best of impeccable features. Both the loans are same, but you need to inform the lender that you are availing a personal loan for the purpose of travel .
However, it is important for you to make sure that that to qualify for additional benefits can't justify to borrow more money from the bank what you actually need. In addition to this, there might be a possibility that the increased interest charges on your maximum loan amount may destroy all your loan benefits gained.
More the point, not only the banks, in fact many reputed travel agencies are also available in the market that can offer you a loan amount, if you book your holiday with them. But, it is important to say good-bye to such agencies as they offer you higher interest rates, higher fees ,and also they have more strict terms and conditions.
Before planning for a loan, your first decision is to secure your loan against your existing asset like your home. The loans which are secured, usually offer better interest rates in comparison to unsecured loans. Apart from this, they are easy to be availed by such people who are suffering from bad credit history. As far as secured loans are concerned, they generally provide you with more flexibility along with low fees, but the only thing is that they take a bit long time to approve.
Moreover, travel loans are usually short-term loans, but again it totally depends upon bank to bank, how they look at your profile. But, it would be great to apply for a small travel loan to repay the amount easily.
However, if you are a kind of traveler, who would like to fund his/her travel expenses through credit cards, then it is very important for you to know the ins and outs of doing that. Yes, read this article below to know what are the advantages and disadvantages of funding your travel expenses through credit card:
| Advantages | Disadvantages |
| Convenience- With the help of credit cards, one can save lot of time while travelling. You don't need to search an ATM so as to have the cash. | Overuse-Once you have a credit card, you can spend the money beyond your limits, at times for unnecessary things while travelling. |
| Record Keeping-Your credit card statements allow you to keep an eye on your expenses, while travelling. You can easily know, on which things you have spent more. | Paperwork-With paperwork, you need to save the receipts, and can easily cross check them against your monthly statements. |
| Low Cost Loans-Through this way, you can use your revolving credit to save for today. | High-Cost Fees-If you have a balance or missed any of your payment earlier, your purchase while travelling becomes quite expensive. |
| Instant Cash-You always have the money with you, whenever you need it during travelling. | Unexpected Fees-With credit card, you need to pay between 2 to 4 percent of high interest rates so as to get the cash in advance. |
| Perks-If you use your credit card very frequently to fund your travelling expenses, you can also get perks and incentive from many credit card companies. | No Free Lunch—The high rate of interest and annual fees usually overweight the additional benefits received by you on your card. |
| Build Positive Credit-If you maintain a good credit history, it increases your CIBIL score, this thing will help you in the future. | Deepening your Debt- These days people use credit more. So, if you charge freely, your balance increases, hence you need to clear your monthly minimum payments. |
| Purchase Protection-Many credit card companies handle disputes for you. So, if you want to return any product during your traveling purchase, you can get in touch with your credit card company. | Homework- It is totally on you to ensure that you will get the full credit for fraudulent charges. |
| Balance Surfing-Plenty of credit card firms offer very less introductory interest rates for travelling purpose. So one can move his balance to cards with lower rates. | Teaser Rates-Providing low introductory rates might lure you, but they are limited for certain time. When your teaser rate expires, the interest rates will drastically affect your card. |
Whenever you apply for a travel loan, always try to ensure that it should be as flexible as possible. It should be decked with features like-no charges for repaying the loan amount early, making lump sum repayments or last, but not the least increasing monthly EMIs. Yes, once you take into consideration these points, it becomes quite an easy and hassle-free job for you to avail a travel loan. Moreover, you just need to pay attention to these minute details, and your travel loan journey will become smooth and memorable.
Travel Loan EMI Calculator
Lets' understand the concept of travel loan with the help of an example below.
Suppose you want to travel to London and looking a travel loan of Rs.18,00,000 for that. Now, one lender is ready to give you this loan amount at an interest rate of 18.40% p.a. for 5 years, what would be your EMI? What is that amount that will go every month from your pocket? Excited in knowing? Well, go through this article below.
Below is the table showing EMI, Interest Outgo and Total Amount Payable on your travel loan.
Loan Amount | Interest Rate | Tenure | EMI | Interest | Total Amount |
Rs.18,00,000 | 18.40%p.a. | 1 | Rs. 1,65,367 | Rs. 1,84,402 | Rs.19,84,402 |
Rs.18,00,000 | 18.40%p.a. | 2 | Rs. 90,212 | Rs. 3,65,080 | Rs.21,65,080 |
Rs.18,00,000 | 18.40%p.a. | 3 | Rs. 65,436 | Rs. 5,55,698 | Rs.23,55,698 |
Rs.18,00,000 | 18.40%p.a. | 4 | Rs. 53,252 | Rs. 7,56,095 | Rs.25,56,095 |
Rs.18,00,000 | 18.40%p.a. | 5 | Rs. 46,101 | Rs. 9,66,045 | Rs.27,66,045 |
Amortization Table
Year | Principal | Interest | Balance Amount |
1 | Rs. 241,727 | Rs. 311,485 | Rs. 1,558,273 |
2 | Rs. 290,153 | Rs. 263,059 | Rs. 1,268,120 |
3 | Rs. 348,282 | Rs. 204,930 | Rs. 919,838 |
4 | Rs. 418,056 | Rs. 135,156 | Rs. 501,782 |
5 | Rs. 502,478 | Rs. 51,404 | Rs. 0 |
Loans to Travel the World:
These days, not only one, but plethora of lenders are available in the market, known for offering the travel loan to the customers. Moreover, the best thing about these lenders is the fact that they are here to fulfill your dreams while ensuring that you travel to your favourite destination. You can easily avail the loan online with minimum documentation easy process and fastest approval. But, be careful while choosing a lender. Do your research and compare different lenders so as to grab the best deal.
Holiday Loan with Bad Credit
These days, many banks and financial institutes are ready to offer holiday loans to those people who are not enjoying a good credit. Yes, these lenders work on the profile of such applicants who are not having a good credit score. They ensure that these people can easily get the travel loan without any hassle. So, if you are also someone who is not having a good credit score, and worried whether you can avail the travel loan or not? Nothing to worry as it is possible with the help of some lenders available in the market.
So, by keeping all these important points in mind, you can make the most out of your flexible and unmatched travel loan package, offered by different renowned banks. Besides, you can also take a personal loan from any of the bank to meet your financial requirement for planning your travel. However, the terms and conditions of the loan is more or less similar, as some banks or offering travel loan and some are offering personal loan for any personal reason be it travel or shopping or anything. So, if the bank is not offering travel loan specifically, then search for a good deal in personal loan.
Borrowing Money from the Bank
If you want to travel to your favourite destination and don't have enough savings for that, nothing to worry as you can easily borrow money from the bank so as to fulfill your need. Yes, there are plenty of banks available in the market right now that actually fund your travel expenses by giving you travel loan. You can apply for a loan with them any time and can plan your travel. But, when it comes to selecting a bank, you need to be bit careful while doing so. Make your choice carefully and choose a bank that suits your needs.
Loans for Travelling
Want to travel to your favourite destination, but don't have enough funds? Nothing to worry as travel loans are here to help. Yes, with the presence of different lenders, it is easy for you to avail the loan without any hassle. All you need to do is just apply for the loan either online or at branch so as to avail the loan at the earliest. But, before availing the loan, make sure you have chosen the right lender so as to grab the best deal.