The economy is now opening up after the dreadful impact of COVID-19. Many industries have recently started operations again, and the tourism industry is one of them. People have been locked inside their homes for the better part of two long years. In these times, who wouldn’t want to get out for a while? One can always turn to personal loans for travel if he or she is worried about their finances.
What are travel loans?
Travel loans are simply personal loans taken out for the sake of touring. Most financial institutions in the market offer travel loans for both local and international trips. A travel loan having interest rates beginning at 10.75% per annum (p.a.) and payback terms of up to six years is present. A personal loan of up to Rs. 40 lakhs is given.
Why should you take personal loans?
A few of the reasons why one might consider seeking a travel loan are as follows:
- Do not intend to spend much money on a luxury vacation.
- Want to spend time with the family but don’t want to delay the plan due to a lack of cash.
- Do not intend to liquidate the funds and do not want to disturb long-term financial assets like fixed deposits, NSCs, etc.
What should you know before taking personal loans for travel?
People should know the following 8 things before taking personal loans for travel:
- Online process: Unlike most loans, a person does not need to visit a bank or financial institution’s office to fill out the form. One can get all the information they need and even arrange for personal loans digitally from the convenience of their home.
- Unsecured loan: A travel loan has a major advantage over other types of borrowing because it is fully “unsecured.” This implies that people are not required to mortgage any assets as collateral or security for the loan. Besides, most travel loans do not require people to offer a backer or guarantor to get the loan.
- Straightforward process: Because the person may apply for personal loans digitally, the entire procedure is simplified and transparent. From loan application through loan disbursement, the whole process is digital and may be watched and tracked anytime via the internet. Even the bare minimum of documents necessary can be made available online.
- Limited sum: Because it is an unsecured loan, there is a limited sum for travel loans that are obtained. The limit is established by the monthly salary as well as other criteria, such as credit history and the type of job.
- Flexible: Contrary to common belief, a travel loan is a fairly flexible form of financing that covers more than simply the expense of plane tickets. One may use it to cover lodging fees, sightseeing expenses, food and beverage expenditures, and even shopping while on vacation.
- Low-interest rates: Taking out a loan with a credit card could be quick and simple. On the other hand, banks and financial institutions impose much greater processing costs and interest rates on credit card loans. A travel loan, on the other hand, may be obtained in the same amount of time and at significantly lower interest rates. Thus, people may borrow far more funds with a travel loan than a credit card.
- Flexible repayment time: People may enjoy easy and flexible repayment options with a travel loan. It is normally up to customers to choose when to repay the loan. If a person takes a travel loan, they may return it in “Equated Monthly Instalments (EMIs)” across 12 to 60 months, or 1–5 years. And, should one want to repay the loan before the end of its term, one can make a prepayment or a partial payment.
- Variable repayment: It is relatively simple to repay a travel loan. Electronic payments can be made through the Electronic Clearance System (ECS) or the National Automated Clearing House (NACHA) (NACH). If one insists on making payments privately, one can send post-dated cheques. People may also personally set up a periodic inter-bank transfer with their bank by submitting a debit mandate or a standing instruction.
What do you need to be eligible for travel loans?
In most circumstances, some of these aspects will be included in the eligibility requirements:
- The applicant shall be an Indian citizen.
- The applicant’s age must fall within the age group provided.
- The applicant must provide identification proof and proof of address.
- The candidate should work for a Multinational Corporation (MNC), a Public Limited Company (PLC), or a Private Limited Company (PLC).
- The candidate must be an employee.
- The candidate must have an employment ID card and salary slips.
Which are some of the best personal loans for travel in India?
1. HDFC Bank Travel Loan
- Personal loans with low-interest rates are available from HDFC.
- HDFC accepts various payment methods, including cash, check, and internet transfer.
- The processing fee adds up to 2.5% of the total loan amount.
2. Tata Capital Travel Loan
- Tata Capital provides loans paid to the borrower’s account in as little as two days.
- This loan is available to anyone with a monthly income of Rs. 20,000.
- The bank does not require any additional security or collateral to give travel loans.
- The processing fee is 2% of the total loan amount.
3. Axis Bank Travel Loan
- The travel loan has a two-month moratorium term. For the first 2 months of the loan term, no EMI would be charged.
- This loan is available to all salaried workers having a monthly salary of at least Rs. 15,000.
- The processing fee is fixed at the discretion of the bank.
Now that you’ve learned the basics of travel loans, you’re better equipped to employ this form of borrowing to support your domestic or international vacation. To understand the terms of the loan, go to the Piramal Finance website and check out their services.