Travel opens up your mind. It gets you out of your comfort zone and lets you experience the world in a new way. As the saying goes, investing in travel is like investing in yourself. But some hurdles might delay your travel plans. These could be a busy schedule, health issues, or a lack of funds. If the reason is the last one, then worry no more. What you need is a personal loan for a vacation. It lets you take that long-overdue trip without digging into your savings or maxing out your credit card.
First things first, make a plan, considering all your travel expenses, from flight tickets to shopping and accommodations. If it is a family trip, the budget will increase depending on the family size. Calculate all the expenses, and then you can easily apply for a vacation loan online. Let’s have a more detailed look at why a loan for a holiday trip can be a good idea.
Things to consider before taking a personal loan for vacation
A few things you should keep in mind before opting for a vacation loan.
- Plan your trip. Make a list of all the expenses that might occur. This will help you from overspending and give you an idea of where you can save money. Keep a 10% margin for contingency expenses as well.
- Borrow based on your repayment capability. Cut down on unnecessary or luxury expenditures. This will save you from defaulting at the time of repayment.
- In the future, you might need more funds for other things. Hence, try to keep the tenure as short as possible. This will also cut down on the interest amount you will have to pay on the vacation loan.
- Check all the part and full prepayment clauses before you apply. Some banks and financial institutions set a minimum number of EMI payments limit. Some banks allow prepayment after 6 EMIs while some after 12. So, it is best to check all the clauses and repayment schedules before signing up for a loan for a holiday trip.
Reasons for choosing a personal loan for vacation
- You can use it for any purpose
Vacation loans can be spent on various expenses that a trip demands. From booking flight tickets to hotel stays, sightseeing, shopping, eating and all the other activities that come along the way. A personal loan for vacations can also be used for medical emergencies that occur while travelling. There are no restrictions on its end use and you can spend it as you like.
- Easy EMIs
A personal loan can be repaid in Equated Monthly Instalments (EMI). EMI can be calculated before taking the loan. This will give you an idea of the monthly instalments you would have to pay. You can easily plan how you are going to repay the loan amount in the future. This saves you from breaking your savings and keeps the trip free of burdens. The EMI amount depends on a few factors like loan amount, tenure, interest rates, etc. After a certain number of EMIs have been paid, you have the option to foreclose the personal loan by paying the remaining amount.
- No collateral
Personal loans are unsecured. Meaning, they don’t require collateral. You can get personal loans without any security or a guarantor. This means you can obtain a loan for your holiday trip without putting any money or asset at stake. The lender will check a few parameters before sanctioning the loan. These parameters usually include a healthy credit score, employment status, work experience, etc.
- Flexible tenure
According to your repayment capability, you can select your loan tenure. Generally, they range between 12 and 60 months. If you choose a longer tenure, the EMI amount will be less. However, this also means you will be paying higher interest on the loan amount. Whereas a shorter tenure means more EMI. But, the loan will be paid off quickly, which means less interest. You need to find the right balance between the two based on your financial health.
5. Easy Application Process, Less Documentation, Instant Approvals
While planning a trip, the last thing you want is a tedious loan application process. The good news is personal loan applications require minimal paperwork. You need to check personal loan eligibility and apply for the loan, which takes only a few minutes. If all the parameters are aptly met, the loan will be approved instantly. Some institutions provide pre-approved instant loans. You need a healthy credit score to qualify for that. Once approved, the money is usually dispersed in less than 2 or 3 days.
Personal loan documentation includes:
- Filled loan application form
- Identity and address proof
- Income proof
A personal loan for vacation is the easiest way to finance your travel. It’s quick and hassle-free. The main things you need to consider before applying are interest rates, tenure and loan amount. Make sure you have a plan for all the expenses before you take a vacation loan. This will keep the overspending in check. For more finance-related blogs and other queries, you can visit us at Piramal Finance.