Personal Loan

Is a Personal Loan or a Credit Card Better for Travelling?


Loans are the best possible way to fund your needs and not put much stress on your budget. There are a lot of things that you need to keep in mind regarding loans. Be it a credit card or a personal loan, you need to know about the basics to make an informed decision.

When you need instant money, be it for your expenses or meeting your urgent needs, both personal loans and credit cards can help you out. Having said that, there are still many variations between a credit card and a personal loan which you must learn. 

Read on to learn about personal loans and credit cards, the differences between them, and the best option during travelling. 

Personal Loan for Travelling Expenses

A personal loan is a financial tool that you get from a lender to cover your urgent needs. You can use this money to make a down payment, pay for your education, or plan out a trip to a destination. The lender in return charges you with a given rate of interest for a specific period within which you are bound to repay the loan. 

For travelling purposes, if you are planning for a long stay and you think that you need a lump sum amount, then a personal loan can be the right fit for you. Make sure that you don’t go astray at the same time because it is a form of debt. It will create certain financial distress on your expenses in the long run. 

Benefits of opting for a personal loan for travelling purposes

  • Low rate of interest: Lenders charge a low rate of interest on a personal loan. So, you can easily repay the loan. A low rate of interest enables you to smartly better your expenses and plan your finances.  
  • No collateral: Banks and NBFCs don’t ask you for collateral for a personal loan as it is an unsecured loan. You don’t have to pledge any of your assets to get the loan. 
  • The long tenure of repayment: The loan tenure is longer for personal loans. The range is between 12 months to 72 months. You have to pay the loan amount in EMIs till the loan period ends. 
  • Quick approval: The approval period is quick, often between two to three days. Once all your papers are verified and you get a loan sanction letter, the amount will be sent to your account within this period. 
  • Easily payable: Banks and NBFCs need you to pay the loan through EMIs. This option makes the repayment process easier to manage. There are other options like a “Flexi” option in which you only have to pay the interest for the amount you utilise, instead of paying for the entire amount. 

Using credit cards for travelling purposes

Credit cards are a great form of short-term debt that allows you to use money up to a certain limit. At the end of the month, you have to repay the amount, failing which you will be subject to late payment fees and charges. 

Credit cards are a great way to prevent unnecessary splurging and good credit points are always going to help you, be it in loans or while availing any offer. For short-term travelling purposes, where you think that the expenses are not at all on the higher side, you can consider using a credit card. 

Benefits of using a credit card for travelling purposes

  • Easy to apply: You can apply for a credit card online at any time in a few basic steps. 
    The benefit of a credit score: With a good credit score, you can easily avail of any type of loan, be it a personal loan or a business loan. Getting a credit card is an easy way to create a credit history and get a high credit score.

  • Discounts and cashback: Using your credit card to pay your bills at restaurants and while shopping, often helps you in availing discounts and cashback. 

Which is better for travelling: a credit card or a personal loan? 

The answer is both of them can be used to cover your travelling expenses, depending on the place you visit and the duration of your stay. 

Credit cards have their own benefits, but a major benefit is free stays, free lounge use and discounts at restaurants. Some banks often give you these benefits for credit cards and not for debit cards. But, it is also vital to keep in mind that credit cards are known as revolving debts, and the interest rates are quite high. 

In the case of a personal loan, you get a lump sum amount to use for your trip to your favourite destination. You can use this corpus to plan a vacation with your family and repay the amount in EMIs. The interest rates are also low, and you get a lot of time to repay the loan. But, if you just need a little amount of money and your stay is going to be on the cheaper side, then you might not avail of a personal loan


So, the answer depends on the purpose of your travelling: if you want to make a trip for a shorter duration where the expenses are going to be minimal, go for a credit card and if your stay is going to be expensive, then a personal loan is more suitable. Before you plan your trip-related expenses, make sure you assess both options before making an informed decision. Visit Piramal Finance to get the best offers on personal loans with low-interest rates. You can also check the blogs and articles on the platform to boost your finance skills.