Need a vacation? Here’s how a personal loan can help you get there faster

Most individuals value the aspiration of embarking on a trip to explore new destinations. Economic constraints, however, often pose a significant barrier. Travel personal loans offer a convenient means for individuals to finance their holidays without depleting all their funds. To assist you in fulfilling your dream holiday, this article discusses the basics of taking a personal loan for travel.

What is a personal loan for travel?

Travel loans are available by finance institutions to cover travel-related costs such as airfare, accommodations, and other necessities of the trip for national as well as international travel. With travel loans up to ₹40 lakh, interest on travel loans generally begins at 10.75% per annum.

Advantages of opting for a personal loan for travel

• Quick financing: Travel loans offer immediate access to funds, allowing you to plan and set off on your journey without stress. ​
• Flexible repayment schedules: With repayment terms stretching up to six years, you can select a repayment plan that suits your income. ​
• Preservation of savings: You may ensure that your savings and investment are safe from unexpected expenditure or crises by opting for borrowing money.

Eligibility criteria

• Age: The candidates should typically be 21–60 years old.
• Income: A regular income stream.
• Employment status: Self-employed and salaried individuals.
• Credit score: Having a good credit score increases the possibility of being approved and could lead to better interest rates.

Steps to secure a personal loan for travel

1. Determine your needs: Gather the complete estimated expenses between accommodation costs, transportation expenses & miscellaneous items. ​
2. Research lenders: Study the offerings from various financial institutions by researching their presented interest rates along with available terms and cost. ​
3. Check your eligibility: Check your eligibility by analysing the set requirements for approval.
4. Prepare documentation: Having the necessary documents ready to apply can streamline the process.
5. Submit a loan application: Submit the application online or offline whichever is suitable for you.
6. Approval: If your loan application receives approval, then the amount will be credited to your account.

Considerations before choosing a personal loan

• Charges and interest rates: The total cost of the loan might be influenced by the interest rates and any other fees, like processing fees.
• Ability to repay: Check if you can afford monthly payments without compromising your financial stability.
• Alternative sources of finance: For the most cost-effective option, explore alternative modes of finance such as utilising available credit facilities or pre-paying through savings.

In conclusion, always remember the associated interest rates and charges with personal loans as it leads to a higher amount of repayment which can make you enter into a debt trap. You can start your holiday in comfort and confidence if you know the process of borrowing, review your finances, and select a lender that caters to your interests.

Disclaimer: Mint has a tie-up with fin-techs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.