Taking out a Personal Loan for Travel is an excellent and easy way to fund a dream holiday without instant financial stress. Also known as a holiday or vacation loan, it is an unsecured loan you can get without putting up collateral, getting a guarantor, or providing any security. Loan seekers can easily avail these loans online from the websites of top lending institutions like Clix Capital. Simple eligibility conditions and minimal documentation requirements make these loans easily accessible without any trouble at all.
If the idea of availing an instant loan online to fund an upcoming trip sounds intriguing, here are eight vital facts you must know about travel loans in India.
- Travel Loans are Unsecured Sources of Finance
One significant advantage of travel loans over other loan types is that they are collateral-free. That effectively means applicants don’t need to pledge any property as collateral to secure the borrowing. Notably, most Personal Loans do not require the borrowers to submit security or produce a guarantor to obtain the funds. With a reputable NBFC, borrowers can get an instant vacation loan with no collateral.
- Personal Loans are Accessible Completely Online
Unlike most other loan types, aspiring borrowers do not need to manually visit the branch office or financial institution to fill out the loan application. Technologically-advanced NBFCs make all the necessary details available on their website, allowing loan seekers to understand and apply for a loan online from the comfort of their homes. All they need is an internet-enabled computer or smartphone.
Besides being extremely convenient, the online loan application saves energy and time. That is especially beneficial if the applicant needs money for an urgent trip and doesn’t have time to handle all formalities and paperwork.
- Borrowers Can Cover Various Travel-Related Expenses with a Personal Loan
Contrary to what many believe, Personal Loans are highly versatile forms of borrowing that cover more than just the cost of air tickets and hotel accommodation. Borrowers can use the loan amount to cover various expenses related to their trip since these loans have absolutely no limitations on how to use them. Apart from transport and accommodation, borrowers can use the loan to pay for sightseeing, food and beverages, and even shopping at their favorite destination.
- The Available Loan Amount Depends on the Eligibility
Since a Personal Loan for Travel is an unsecured form of borrowing, lending institutions set minimum eligibility criteria to assess applications. Work experience, monthly salary, credit score, and financial obligations are crucial factors that lending institutions and NBFCs consider before approving a Travel Loan. Therefore, they check each applicant’s credibility thoroughly while evaluating their loan application. Applicants with a credit score of 630 or above can get loan approvals at competitive interest rates.
- Repayment Options are Flexible
With a holiday loan, borrowers can choose a flexible repayment tenure of 12-48 months, best suited to their monthly budget. Choosing a prolonged period reduces the EMI amount while a short term increases it. Most borrowers opt for the fastest possible loan tenure with EMIs they can easily afford. It helps them pay off the loan as soon as possible without stressing their budget. Opting for a short term also saves money on the interest outgo by decreasing the number of EMIs to be paid.
A Personal Loan EMI calculator is an efficient online tool that helps calculate EMIs for different loan terms. It uses a mathematical formula to calculate the EMIs based on the loan amount, interest rate, and repayment term. After getting an idea of the EMIs for various loan tenures, loan seekers can make informed decisions according to their income, DTI ratio, and overall repayment capacity.
- Applying for a Travel Loan is Simple and Quick
Since most modern NBFCs support a 100% online loan procedure, the entire application process has become much faster and simpler than ever. Aspiring borrowers can find every intricate loan detail online, check the loan conditions, and finalise the loan that best suits their requirements and repayment budget.
After selecting the most suitable loan, they can fill out the online application form on the NBFC’s website and submit the application. The application form requires basic details, including the applicant’s personal and professional information. The entire procedure is paperless, and some NBFCs do not even ask the applicants to submit their documents online. They have integrated systems to verify applicants’ details using their KYC information.
After evaluating the application online, NBFCs approve the loan instantly and disburse it directly into the applicant’s account instantly.
- Personal Loans Have Lower Interest Rates Than Other Funding Options
Using a credit card to cover a trip’s expenses might be instant and more accessible than a Personal Loan. However, credit card interest rates and processing fees are much higher. On the other hand, a travel loan has much lower interest rates than credit cards. Moreover, obtaining a travel loan is quick due to a 100% online loan procedure. Furthermore, travel loans provide a much more considerable sum with easy repayment options.
- Personal Loans Have Eligibility Criteria in Place
Loan seekers can qualify for travel loans only if they satisfy the lending institution’s set eligibility criteria. Eligibility conditions may vary between lending institutions and NBFCs, but in most cases, they include the following elements.
- Minimum and maximum age requirements
- Minimum income requirement
- Employment in an established company
- Work experience of at least a few years in the current company and overall
- High credit score and low DTI ratio
After going through these aspects of a Personal Loan for Travel, loan seekers can better prepare to borrow these funds and plan their travel within the country or abroad. However, remember to pay the EMIs on time since delays can adversely affect credit scores and loan eligibility in the future.