Everyone needs a holiday once in a while to unwind. But whether it’s a week-long backpacking trip or a weekend getaway, travelling can weigh heavy on your wallet. Many people opt for a credit card or a personal loan to fund their trips. But is one better than the other? Find out in this article.
Using personal financing for travel
Personal financing offers an array of advantages. It is a collateral-free loan, which you can use to cover all your expenses associated with travelling, including airfares, tour packages, hotel charges, travel gear, etc. Besides, nowadays, you can apply for personal financing online with minimal documentation requirements and a low processing time at Tata Capital.
The eligibility criteria for personal finance primarily includes your CIBIL score, age, monthly income, and work experience. With a good CIBIL score, you can qualify for a high loan amount at lower interest rates. You can also avail of additional features, such as an overdraft facility and flexible EMI plans.
Additional Read: 5 Reasons Why a Personal Loan for Travel is Right for You
Using credit cards for travel
With credit cards, you can instantly pay for purchases, such as hotel bookings, dining, transportation fares, and more on your trips. Credit cards offer excellent incentives, including reward points, cash backs and vouchers for spending.
Besides, you can delay your repayment by making minimum payments monthly without losing your card privileges. You can easily increase your credit limit with good payment history, a high CIBIL score, and a pre-existing relationship with the bank.
Personal loan vs credit card: which is better?
Credit cards and loans come with their own set of advantages. With credit cards, you can fund your travel expenses in real-time at 0% interest for the first 40-50 days. However, the interest rate charged after the initial period can be pretty high compared to the personal loan interest rate.
With personal financing, since you get the loan amount upfront, you can plan your travel better and avoid excessive spending. Also, unless you have a very high credit card limit, you can borrow a comparatively higher loan amount.
So, what is the verdict on personal loan vs credit card for travel? The answer lies with your borrowing needs. Depending on your loan amount, need for flexibility, loan term and other perks, only you can decide which option works the best for your situation. Each financial institution offers a different set of advantages for personal financing and credit cards. So, understand your needs and compare the benefits. The worthier candidate will shine through.
Additional Read: Tips to Save Money Through Personal Loans
Fund your travel plans with Tata Capital
Whether you want a luxurious holiday or need immediate funds for an emergency trip, Tata Capital can help you with your needs. We offer personal financing starting at an attractive interest rate of 10.99% and flexible tenures up to 6 years.
Enjoy structured EMI plans, overdraft facility, collateral-free funding, swift disbursal, and zero charges on pre-payment with us. You can even plan your loan term and EMI with our personal loan EMI calculator.
To know more, visit our website right away!