Opt For A Personal Loan For Vacation - Personal Loan Blog - Tata Capital

Cash-Strapped For Your Vacation? Try Travel Loans

Feb 28, 2017

Very soon, it will be that time of the year when Indians go on vacations. Since schools are closed, most people plan to go on long vacations during the months of May and June. But with rising costs, the cost of vacations have also increased. So it's possible, that if you are having some fund crunches, you might feel like either postponing or cancelling your travel plans.

But that won't be necessary.

Yes. These days, the banks are ready to give out travel loans that help pay for all sorts of travel related expenses. Many people are against the concept of travel loans, as it promotes the idea of 'travel now and pay later' and also because, it does not create any financial asset. But there are many who believe that if one was to save money for travelling to their dream destinations, then it might take years and will be too late. So for those who want to see the world before its late, a personal loan for vacation comes as a blessing.

Now in reality, travel loans are a specific type of personal loans. Since these are unsecured (i.e. without any collaterals), they charge rates similar to personal loan interest rates. The amount available as loan is generally 80% of the total trip expenses. These include flight tickets, hotel bookings, visas, insurances, etc.

Many lenders are even ready to restructure these loans as partially secured personal loans. For this, lenders might demand some collateral (like FDs, etc.). The benefit of this is that it reduces the interest rates of these loans. Some banks might even be ready to raise the 80% cap on lending if they are able to establish the repayment potential of the borrower.

Like all other loans, having a good repayment record helps in getting the loan application approved, and more importantly, allows the borrower to negotiate for a lower rate of interest. So don't worry if you don't have money to travel to your dream destination. If you are capable of servicing the monthly EMIs, then you can take a travel loan and realize your dream today.