Financing travel through personal loans

Aug 2018 | Team Rubique

Simply packing off your bags and setting off to new unexplored places creates an adrenaline rush in us. Travelling is so far the best remedy which helps you take a break from the monotonous sequence of life events that you are always part of. It soothes your soul and gives you an unparalleled sense of calmness.

It takes us to an unknown land where we meet new people and experience new places and culture. An unknown place has its own set of surprises stored for you which you have to dig into to get the best out of that place. Traveling as described above is the best part of someone’s life, but it’s not always done in a good mood. Travelling can be of different kinds such as inescapable family gatherings, traveling for medical check-ups, etc. So, it’s not always a happy journey.

However, whatever may be the reason the first and foremost requirement for traveling is money, albeit the requirement for conducting any event. Shortage of money which you require for that particular trip can cut short your plans and jeopardize your plans in a great manner.

Acute shortage of funds can only leave you with two options:

Canceling the travel plan and letting go off all the things that you had eagerly wanted to do.  

OR

Arrange for funds by going for loans from the various financial institutions.

You don’t want to go with the first option. Though the second option looks attractive, it has its repercussions like taking a loan and having an extra burden on your mind of repaying the amount while traveling to your favorite places. You don’t want to ruin your travel with these thoughts. However, if you think about the brighter side, it’s a lot more fun.

You can easily avail a travel loan to fulfill your dream of traveling and live the memories that you had wished for in your dream destination. These loans are personal loans and hence are unsecured loans given without any collateral or any security. However, in case of high loan amount the lender will want a guarantor.

So how to go about it?

Getting a loan for travel comes under the personal loan category, and it is sanctioned in the same way. The amount can be used to finance all aspects of your travel ranging from flight or train tickets to accommodation, food and much more. Being a personal loan, the processing time of these kinds of loans are fast, i.e. within a period of 7 days. Though the interest rates of these kinds of loans are pretty high ranging from 16% to 25% and the tenure of the loan is also low, i.e. up to 5 years. This makes the Equated Monthly Instalments(EMI) on these loans pretty high. However, if you are getting to travel to your favorite places, then it’s worth it.

Other options

Under the personal loan category what the banks have started giving is “Travel Loans” which are of a secured and unsecured type. With the secured type, it becomes easy for the borrower to go for the loan as it reduces the burden on them and the unsecured ones help them to avail this loan without any guarantor.

One more advantage of these loans is that they can be availed online. The entire process is online, and the loan amount is approved within hours.

Moreover, another good thing about this is that these are way cheaper than your credit card which will incur interest as high up to 36%. So, opting for these kinds of loans is a better option.

Repayment of these loans

It is to be done in the same way as the repayment of personal loans is done. Defaulters of unsecured loans will have their interest rates increased, and in case of secured loans, they will ultimately lose the possession of that particular asset against which you had taken that loan.

Eligibility and Documentation

Anyone can travel, so these loans are for both salaried and self-employed individuals. They can easily apply for a personal loan for travel, but the approval depends on the eligibility of the applicant. The online process requires minimum documentation. Details of your trip such as accommodation bookings, airfare, etc. can be asked for, but it is not required by all.

If you are going by the offline process, you will require documents such as Address Proof, ID Proof, Bank Statement and other related documents.

Whether to go for this or not?

This is the big question. People love traveling but should you raise loans for funding your travel plans. The main thing that it boils down to is, in return for memorable moments and cherished dreams, should you be moving around with an extra burden?

The best travel plans require a good amount of funds and falling short of it can lead to cancellation of that plan and a person who has planned this trip will not want to cancel his/her plan just because they are falling short of a few bucks. If this is the case, then they should go for the loan because nothing is bigger than the memories that you will create. Though there will be an added burden, it is worth it. If traveling is your passion, then no doubt you will be going for this.

Also, in case of travel plans which require huge funds, it’s definitely not wise to use your savings. Instead, you should go for loans as those savings will be there for you if there is any untoward emergency coming your way. Loans can always be repaid once you have got the required fund with you. It’s never a big deal.

Therefore, don’t curb your plans due to the shortage of funds when there is an alternative way to visit your dream destination and live the memories.