8 features of travel loans you should know

It is said that jobs fill your pockets whereas travel fills your soul. Are you somebody who is a true trave lover and leaves no opportunity to use that backpack be it oceans or hills. Traveling to different places brings you close to nature and gives you experiences that you can cherish throughout your life. In the past, people used to plan family trips and spends months or sometimes years to arrange for funds for the same. Today, time is different. We seldom wait for months before packing our bags. We make spontaneous plans and manage to get our funds instantly. This change in the way we live our lives is hugely facilitated by the ease with which we can get instant loans.

What is a Travel Loan?

You must be wondering what sort of a loan can be called a travel loan and how can this be availed?
So, today banks and other financial institutions provide loans for all sorts of travel plans such as solo trips, honeymoon, or a family trip. You can fund your accommodation, travel tickets, transportation, and also travel insurance with these loans. It is very convenient to apply for these loans as they require simple documentation and hassle-free disbursement.

Generally, these loans are available for a period of 2-3 years to individuals withing the age group of 21 to 60 years. The loan amount is mostly restricted to 80% of the total travel expenses. However, this may vary upon repayment capability. The processing fee varies from 1 to 3 percent of the sanctioned amount.

Features of Travel Loans:

Before you plan your next trip, make sure you educate yourself about the following features of a travel loan:

1. What expenses are covered? Often, the borrowers assume that travel loans only cover travel or ticket expenses. However, travel loans can help you with multiple other expenses as well. Individuals can use these funds for your tickets, hotel bookings, excursions, meals, sightseeing, and many more. Truth be told, there is no rule as to where the borrower can use these funds. Thus they can be used to finance any of your travel expenses, big and small.

2. What are the interest rates? There are multiple loan providers in the market today which promise to give you the most flexible loans. They might offer quite attractive loans with low-interest loans. This being said, it becomes all the more important for the traveler to carry thorough research and compare the various agencies. One must look into the processing fees, early repayment charges, and any preapproved offers, if available.

3. How instantly can you get the loan? Travel plans can be immediate or preplanned. Today most of the travel plans are spontaneous and these individuals are often left with no funds to finance their trip. Travel loans here come to their rescue as these can be availed instantly. It hardly takes 5 minutes to get a travel loan and the amount gets credited in the borrower’s account in less than 24 hours. Ultimate guide to Bali with kids HERE.

4. Is it better than credit cards? Many individuals may think of using their credit cards instead of applying for a travel loan. A problem with using credit cards is that they come with several limitations such as high processing fees and lower limits. However, travel loans though similar to credit cards, have lower restrictions and cheap interest rates. This method is also more convenient as it saves us from the hassle of international travel card activation.

5. What are the documents required? Another reason why travel loans are better is that they require minimal documentation. Institutions that provide travel loans are super convenient and do not require many documents. Any individual with proof of identity, address, and employment. It is a good idea to keep all the documents handy while applying for a loan.

6. What can be the loan amount and duration? Individuals can get a travel loan of up to INR 25 lakh with a repayment period of up to 60 months. However, since the loan comes at an interest rate, it is a wise idea to budget the trip in advance to avoid unnecessary expenses. Also, the duration should be short to avoid the later burden.

7. Are these loans collateral free? Travel loans are collateral-free i.e. the banks or financial institutions do not ask for any security for a travel loan from the borrower. Only if the loan amount is quite high, do some agencies ask for collateral.

8. What are the post-sale services? It is recommended to choose a moneylender who would not stop his service once the amount is disbursed, but also provide post-sale service to the customers. There should be a mechanism to address the doubts of the borrower and clarify anything a borrower needs help with. There should be complete transparency about the interest and various charges involved.

Traveling has an important role to play in the life of each individual. It helps people to break the monotony and have a new start to their life. There are thousands of stories of people on how traveling changed their life forever. Since it is a luxury we all deserve, finances should not be a hurdle in our dreams and stop us from creating memories to live by.