A travel loan is a type of Personal Loan that can be used to pay for expenses related to travel, such as airfare, accommodation, tours, and other associated expenses. With lower interest rates than standard credit cards, a personal loan for travel provides a convenient way to finance travel expenses without being burden on your savings or maxing out credit cards. A good credit score and a stable income are essential to be eligible for a travel loan.
Things to know about Loans for a travel application
Before applying for a personal loan for travel, it is important to consider certain factors. Similar to packing for a trip, checking these four things can make all the difference:
● Determine your requirements:
Assess the total cost of your travel and determine the loan amount required accordingly. Remember, higher personal loan payment results in higher total repayment amounts.
● Consider secured vs. unsecured credit exposure:
Maintain a balanced mix of secured and unsecured loans to maintain a good credit history. Applying for a travel loan with multiple active unsecured loans may result in high-interest charges and a low loan limit and negatively impact your credit score.
● Gather all necessary documents:
You must provide some mandatory documents such as address proof, identity proof, and bank statements. Ensure you have all your documents to speed up the loan disbursement process.
● Choose your repayment term wisely:
Repayment tenures for travel loans typically range from 12-60 months, with varying interest rates. A shorter term might result in a relatively higher EMI but a lower total interest payout. Check the lender's terms and conditions for a prepayment option if you wish to pay more and clear off the loan faster.
While planning for your travels, it's important to remember to keep your bank account sufficiently funded to cover any upcoming personal loan payment that may be due while you're away.