6 Tips to Head to Your Favorite Tourist Destination by Availing a Travel Loan
Wednesday, September 18, 2019, 6:00 AM | Leave Comment
Planning a holiday conveniently without having to worry about travel expenses has now become possible due to the availability of travel loans.
The need for a travel loan has gradually increased owing to its lucrative offerings.
Taking a break from the daily chaotic life is what we all need to maintain good physical and mental wellbeing. For this, we often find solace in travelling that gives us a chance to reinvent ourselves.
While travelling can be exciting and exhilarating, it can turn out to be a disappointment if you don’t have enough finances in hand to take care of all the travel-related expenses.
Understanding this, the lenders offer travel loans that ensure expenses do not hold you back from making memories that last a lifetime.
Read on to know about the benefits of availing a travel loan.
What is a travel loan?
Essentially, a travel loan is a type of unsecured loan that helps you cover all the travel-related expenses including hotel accommodation, ticket booking, and others. This type of loan is available at a nominal interest rate, has a low processing fee and can be availed for both domestic and international travel. However, before you plan to avail a travel loan, you must keep several things in mind to ensure you make the right decision.
Six tips to follow when availing a travel loan:
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Check on the loan amount
When opting for a travel loan, borrow only as much as you can repay. Don’t go overboard and end up availing an amount that could hurt your monthly expenses. Plan your travel budget by checking on the food cost, ticket and accommodation costs and other expenses and only then opt for a loan amount that is at least 20% more than the estimated cost.
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Opt for a suitable repayment tenure
Travel loan is generally offered for a tenure of 12 months-60 months. The loan tenures vary and so do the interest rates. Therefore, carefully choose the tenure as opting for a short tenure will attract a high-interest rate, whereas opting for a long tenure will make you end up paying more. Also, ensure that the EMI fits your budget throughout the tenure you choose. Use a personal loan EMI calculator to gauge the EMI outflow in combination with various tenure, interest rate and principal amount. Additionally, don’t forget to check on the foreclosure charges and prepayment option in case you wish to prepay the loan.
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Keep all the documents handy
To avail a travel loan, it is important that you keep certain documents handy without which you will not be eligible to avail a loan. A few of the mandatory documents required when applying for a travel loan are: identity proof, address proof, passport size photograph, salary slip, bank statement, and others. Few lenders would also require you to submit details of your travel i.e. ticket details, accommodation details, and others. Not producing the above documents can lead to loan rejection or approval of the same at a high-interest rate.
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Insure your travel
To safeguard yourself from any unplanned expenses arising due to a medical condition or unfortunate events such as loss of passport, loss of luggage or others, buying travel insurance is a must. Travel insurance helps you cover all types of loss that you incur at the time of travelling; it insures you against unexpected financial loss caused due to loss of baggage, loss of passport, flight delay, medical emergency and others. Getting your travel insured especially if you have availed a travel loan is imperative as you cannot miss out on paying off the EMIs at any cost. Hence, a travel insurance policy always comes in handy in a situation when you suffer any direct or indirect financial loss when travelling.
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Check your credit exposure
Ensure that your credit report strikes a good balance of secured and unsecured loans. If you hold too many unsecured loans such as credit card, education loan, personal loan and others, then availing a travel loan could, in fact, hurt your credit report. Therefore, check on your credit exposure to avoid falling into a debt trap.
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Stick to your budget
When travelling, it is essential that you stick to your budget as not doing so would further land you in debt. Control your spending habits and try to spend only as much as you have. Make a budget plan by allocating a range of amount you would like to spend on food, accommodation, transport, travel tickets, shopping, etc.
Conclusion
In addition to the above tips, ensure that you keep your account funded to pay off the existing EMIs on time while you are busy travelling. Make timely repayments to maintain a healthy credit score and keep a tab on your credit portfolio regularly to avoid falling into any financial trouble.
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