Travel Loan: This is a type of personal loan which you can borrow from any bank or Non-Banking Financial Company (NBFC). With this type of loan, you can easily
cover your travel expenses without disturbing your savings or salary. All you need to do is make space for monthly loan payments. So, say if your travel budget is around Rs 1 lakh, and you borrow a loan amount of the same at a 10.5% interest rate, by paying Rs 8,815 per month, you can cover your travel expenses. The actual loan payment may vary depending on your loan application.
How to apply for a travel loan?
To apply for a travel loan, you need to visit the bank or financial institution's official website or their nearby branch office. Check what the prerequisites are, and if you meet the criteria, the bank will process your request and ask for some documents. Upon successful verification of your documents and meeting all the eligibility requirements, the bank will send you a loan offer.
Who can apply for travel loans?
Both salaried and self-employed individuals are eligible to apply for a travel loan; all you need to do is make sure that you meet the loan criteria and have the valid documentation. The basic documents required for the loan application are: Aadhaar, PAN, salary slip and bank statement.
Upon successful verification of the documents, you will move on to the next step, and the lender will evaluate your loan request. If they find you eligible for the loan, you will receive approval from them.
What are the benefits of travel loans?
Travel loans have made it easier to afford the long-awaited vacation or solo trip you've been delaying due to financial constraints. With the easy to apply system and basic loan requirements, anyone with a regular income can afford a loan to cover their travel expenditure.
How much interest do you pay on travel loans?
There are competitive rates applicable on travel loans; the actual rate depends on the bank or NBFC policy and your creditworthiness. Suppose you show a responsible credit behaviour with your credit score and repayment capacity to afford the EMIs. In that case, it is easy to borrow a travel loan at a nominal rate of interest.
What are the additional charges accrued by banks or NBFCs on travel loans?
Lenders do charge a processing fee, typically ranging from 1-2 per cent of the loan amount. The same is deducted from your loan amount, so if your loan is of Rs 2 lakh, as per the processing fee of 1-2 per cent, the charges would be around Rs 3,000-6,0000. The actual may vary depending on your lender terms and conditions.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
