In most cases, a borrower does not need to put up collateral or have a guarantor to be approved for a personal loan. An individual can take out a personal loan for travel, for example, to meet their financial needs. Travelling requires money, and getting a personal loan for travel can help you finance your trip or vacation if you need quick and easy access to money to travel. Since the money from a loan for travel is not restricted to a specific aspect of your travel plans, you are free to use the funds as you see fit.
Personal loan for travel
It is important to always know the various costs associated with a loan for travel before you apply for one. Your EMIs will be a certain percentage of the total payment. Knowing the processing fees and other charges connected to your personal loan for travel can help you plan your repayments.
Here are some of the costs you may expect to pay when you get a personal loan for travel from financial institutions:
- Application Processing
Application processing fees are one of the costs. This fee covers the cost of processing your loan application. This includes the administrative costs and any other costs associated with conducting the verification process. The typical rate is 4% of the loan amount plus any taxes. You will have to pay this fee when you sign your loan papers.
- Interest on Loans
In addition to the amount borrowed, you also need to pay interest on the borrowed sum, which will be calculated as a part of your personal loan EMIs. There are different rates of interest, which you can find out from the bank or lender who is issuing your loan.
- Defaulting on EMI Payments
This charge will be added to your EMIs if you fail to make your monthly payments. If you do not make these payments on time, the lender can add additional charges to your loan repayments. Because of this, it is very important to check your account balance and pay your EMIs on time.
- Penalty interest rate
If the borrower is late with payments, a steep penalty interest rate will be imposed. This is a penalty for late payments. You should expect to pay between two and four per cent of your past-due monthly payment.
- Early Foreclosure
If the borrower attempts foreclosure on the loan before the maturity date, the lender may charge a fee. This fee normally falls between 4% and 5% when taxes on the principal are not included.
- Prepayment Costs
When a borrower prepays a personal loan for travel in whole or in part, the lender foregoes interest revenue. To prepay a portion of your loan, you will be charged 2% (excluding taxes).
- Annual upkeep costs
This charge is made to maintain your account’s existence. These costs amount to 0.25 per cent each year for a personal loan.
Knowing about these costs beforehand will help you plan your personal loan payments more efficiently. With proper planning, you can ensure that you do not have any additional charges on your loan for travel.
Benefits of Taking a Personal Loan for Travel
A loan for travel enables people to make important emergency trips for weddings, funerals, and other occasions, or even for holiday purposes. Banks and other financial institutions provide a wide variety of personal loans that may be used to cover travel expenses. These are some of the benefits of taking a personal loan for travel:
- You can get the money immediately, so you will not have to wait for a long time to take your trip.
- You can choose an EMI payment schedule and loan term that works for you.
- Personal loans are unsecured loans, therefore you will not be required to offer any collateral.
- The application is available online, and this makes the entire process simple and quick.
- Some lenders provide instant loans against credit cards (instant loans) and need minimal paperwork. However, this depends on your relationship with the lender.
- Compared to credit cards, the interest rates on personal loans are more reasonable.
It is important to consider your ability to repay the personal loan before applying for it. Once you’ve determined that you’ll be able to repay your loan for travel purposes, make sure you borrow the appropriate amount, which should be sufficient to meet your financial needs but not so large that repayments become difficult.
Make sure you have a secure revenue stream before applying for a personal loan for travel. It is important to have a steady income to keep up with your monthly EMI payments and pay them back on time.
Guidelines for Applying for a Personal Loan for Travel
Being an existing customer of a bank or other financial institution will allow you to check your eligibility for a personal loan for travel and have greater chances of your loan being approved. Therefore, the bank where you have an account is a good place to start searching for information on a personal loan for travel.
Most banks have online application options, which is recommended since it is quick, convenient, and gives you an instant record of your application. It is always recommended to find out what documents will be required at the application stage. These usually include identification documents, address proof, photographs, and other relevant information. Having this ready while applying will cut down on the time it will take for you to complete your application process.
For your various travel needs, applying for a personal loan for travel purposes gives you easy access to money almost instantly. In addition to the obvious costs of the money you will borrow and the interest you will pay in the form of EMIs, it is important to be aware of the additional charges so that you are not caught off guard and can follow good financial practices.
Before applying, it is always important to ensure that your credit score is good. This will increase the chances of getting a loan for travel reasons. Visit Piramal Finance for more helpful articles and guidance!