For the last several decades, every finance company in India has been focused on offering loans for housing, business, and gold purchases. But lately, several of these companies have started offering a newer product: private loans for travelling.
This makes sense because the travel industry is booming in India, and people are increasingly looking beyond just traditional tourist destinations like Goa and Andaman to plan their vacations. Here's an overview of the types of loans available for travel right now, how they work, and the pros and cons of using them.
What is a Private Loan for Travelling?
The term 'private loans for travelling' refers to a loan for travel and entertainment. It's a form of personal finance that different financial institutions provide. It's also provided by private lenders who want to lend money to people who want to go on holiday or take a vacation abroad. Usually, these loans are divided into two types - personal travel loans and credit card loans.
Personal loans are a much better option when compared to credit-card based loans because they offer lower interest rates. People also prefer going for personal loans because they have flexible repayment periods and can be availed without any collateral.
On the other hand, credit card loans are based on the outstanding amount on your credit card, and you have to pay them back in the form of equated monthly installments (EMI)s.
Pros andCons
Pros
Easily Accessible: You can avail a private loan for travelling from any bank, NBFC or microfinance institution.
Fast Approval Process: A 24-hour approval process is possible as the lender does not have to rely on any external agency’s approval.
Flexibility: The loan amount can be decided by you and approved by the lender based on your repayment capacity and credit score. It also has a longer repayment window making it easier for you to pay back.
Cons
You might not get the best loan terms: People who have a lower credit score might not get the best loan terms, which means they'll have to pay higher interest rates.
Expenses Covered with Flexi Personal Loan
With a Flexi personal loan for travelling, you can meet your travel expenses. You can use it to book flight tickets and hotel rooms or make arrangements for travel insurance. You can also use the money to buy food and beverages, depending on where you want to go. It can also help you to fund your sightseeing trips without any hassle.
Flexi personal loans offer flexibility not just because they are available from multiple financial institutions but also because they allow users to withdraw funds as per their requirements.
Low-interest Rates
Private loans for travelling can help you save on your overall expenses. As compared to other loans, the interest rates of private loans are lower and fixed for the entire loan tenure. Most of these loans come with minimal processing fees and no prepayment charges. There are also a lot of pre-approved offers available that can help you to get a better deal.
Minimum Documentation
Private loans are not like other loans. Unlike other loans, private loans don’t require you to have any collateral or guarantor. You can avail a vacation loan with a few documents that should include the proof of your identity, address proof and employment proof.
The only thing that matters is the purpose of your application and whether you can repay the amount in time.
Loan Amount & Tenure
The amount you can borrow under a private loan for travelling depends on the amount you apply for. If you apply for a smaller loan, then your monthly instalments will be low too. However, if you choose to take up a bigger loan with higher monthly instalments, the tenure will obviously get longer by default.
The more money they lend out, the better their interest rates and terms would be as well, so consider taking out more than what you need if possible because this will help save some cash later on when it comes time to pay back those monthly instalments each month!
Online Application & Approval
When you need funds for travelling, you can apply for a loan application online without visiting your lender's branch. This helps you to save up time and makes the loan process easier. The approval process is also quick, and in most cases, if your loan gets approved, you get the funds in your account within 48 hours.
Conclusion
So, if you are confused about whether to apply for a personal loan or not, then don’t think twice, as it is the best solution for your travel worries. Personal loans with flexible repayment options and minimum interest rates are not that uncommon now that we have so many new fintech lenders. Further, applying for a personal loan is also relatively easy these days with the help of online applications. So, if you are planning to travel anytime soon or have already planned an international trip that you need help paying for, then apply quickly for a personal loan that is right for you and start exploring the world!
Author Bio: Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee - India's fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn't stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.