Is Personal Loan for Travel a Good Idea?

benefits personal loan

Yes, this will help you manage the travel expenses at an attractive rate of interest. Unlike secured credits, this won’t need any collateral such as fixed deposits, mutual funds, etc. The lender will offer you a Personal Loan for Travel based on your income and other factors. Read this article and know more about this loan product.

Personal Loan for Travel Expenses

When planning your travel, money plays an important role as hotel bookings, flights, dinners, etc. are costly. To cover those expenses, people usually go for credit cards. But they don’t know that heavy credit card usage can result in high debt, which could possibly lead to a default. And this could make your credit score poor. To avoid situations like this, Personal Loan for Travel helps. Using this, you can borrow a lump sum amount and book your travel destination, flight tickets, hotel, dinners, concierge, etc. 

How Much Interest Does Personal Loan for Travel Come With?

A personal loan comes with an interest rate of 10.00% to 18.00%  per annum on average. This may vary based on your lender. You can get a lower rate on your borrowed amount if you convince the lender of your timely repayment capacity. And this can be done if you prove a high income and default-free credit history. For this, you need to submit the below documents 

  • Salary Slip
  • Bank Statement
  • Credit Report

You can collect the salary slip from your employer. Using this document, the lender knows your regular flow of income and the number of years you have spent in the current organization. Visit your bank branch and ask for your bank statement. Using this information, the lender knows the amount you save each month from your monthly income to find whether you have enough savings left to pay the EMIs. 

Personal Loan for Travel Repayment Structure

In a personal loan, you will get a loan tenure which is a maximum of five years. And the borrowed amount plus the applicable interest is serviced through equated monthly installments. So, make room for an EMI in your budget when you’re considering getting a Personal Loan for Travel. There are several payment methods available to you by which you can repay the EMIs. The preferred one is the ECS, in this, your EMI will be debited from your account every month automatically. So, maintain your account balance during the loan tenure to avoid missed EMI payments. 

Because when you miss a payment, a penalty of 2% will apply to the due amount. And this could impact your repayment structure negatively. 

Are There Any Fees Applicable on Personal Loan for Travel?

Yes, the lender may charge the following fees from the borrower –

Processing Fee

An amount for the loan processing is reduced from your borrowed amount. This is a non-refundable amount and can go up to 2.50% to 3.00% of the loan amount. Do check the processing fee while choosing a Personal Loan for Travel.

Full and Part Prepayment Fee

The lender allows you to fully or partially pay the loan outstanding balance to reduce the total outstanding. In the case of part payment, you need to pay a lump sum amount so a portion of the loan balance reduces. Whereas, in full prepayment, the whole loan outstanding balance needs to be paid in a lump sum. 

This facility is allowed to you after continuous 12 EMI payments. In the case of part payment, the fee is 2-5% of the part paid amount. Whereas, for full prepayment, the charge will be 2-5% of the loan outstanding. 

EMI Bounce Charge

In case your personal loan emi calculator bounces, a fee of INR 500 or more needs to be paid along with the applicable GST.

So, next time you plan a vacation, do consider the Personal Loan for Travel.

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