We all crave for a quick retreat to escape the scorching summer heat. But at times, stuck between our monthly commitments and stringent budgets, planning a short trip might seem like an impossible task. But if you have a secured employement, then you can apply for a salary loanto take care of your travel expenses. A salary loan is a type of personal loan that’s easy to avail and quick to process. It requires minimal documentation, zero collateral and comes with no end-use restrictions. This means you can use the salary loan to meet any kind of expenses, including your ticket booking, hotel booking, food and activities, shopping and other costs.
With the advent of online loan, availing a salary loan has become easier than ever.They also offer you best offers of your loanin terms of interest rates, fees and other conditions on the loan.
What is a Travel Loan ?
Planning a tripcan be expensive even if you plan a trip on budget. It might strain your savings and take away your emergency funds. While one option is to pull out your investments, applying for a travel loan is a better alternative.
A travel loan is considered a viable option to cater to your holiday expense for many reasons. Firstly, because it is easy to apply. Secondly, you get access to quick funds as and when you need. Thirdly, the interest rates on personal loans are lesser than credit cards. Fourthly, the earnings on your investments is more than the interest you would pay on your personal loan if you make smart financial decisions.
Why should you opt for a travel loan?
1. Easy application procedure
While securing tickets to your preferred vacation spot can be difficult, applying for a travel loan is simple. Applying for a travel loan is an easy and quick. You just need to complete the application form and submit the necessary documentation. If you meet the lender’s criteris, then your loan application would get approved within minutes.
It might take a day or two to verify your details and process your loan amount. The loan amount would reflect in your account within 24 to 48 hours. Since it is possible to get an online loan these days for travel, you can use the online interface of the digital lender to complete all the necessary paperwork online.
2. Flexible repayment schedule
With an online loan you get the flexibility to choose your repayment schedule. You can use an online calculator to estimate your monthly EMI that you would have to pay for different loan tenures. This will help you find the loan tenure that best suits your affordability. In addition to this, the loan apps also allow you to choose a specific date and time when you would want to schedule your repayments.
3. No collateral
When applying for a travel loan, the lender do not seek collateral. A collateral is a guarantee that you offer to the lender which they can auction in case you fail to repay the loan amount. But in case of a salary loan, you do not have to provide such collateral.The lender offers you the loan based on your monthly salary and your credit score.
4. Diverse utility
There are no restrictions on how you want to use the loan amount. The money can be used to reserve rooms at the best hotels or business-class airfare. The money can be used to purchase clothing, travel, or gifts for friends. A travel loan has no set final use, so you can put the money to any use you like.
Things to Consider When Choosing A Travel Loan
1. Select the right loan amount
Set a cap on the amount of money you think will be sufficient to pay for your holiday expenses to lower the likelihood of going over budget. Create a 10% buffer on top of these funds for unforeseen costs or any overruns as the online loan application and disbursement will only happen once.
Instead of spending extra money on luxuries when travelling, borrow only what you can afford to return. The cost of your chosen route (which includes fees for meals, hotel, etc.) and the size of your loan are clearly trade-offs. Spending more than you can afford will strain your monthly budget and raise your risk of defaulting on your debt when it comes to repayment.
2. Go deep to find the right Loan tenure
Keep the repayment period as short as possible while keeping it in line with your monthly spending plan. Longer the term, the higher the interest payment. Additionally, you may require additional income for a home, a car, company expenses, or medical costs. In that instance, significant previous loans could reduce your eligibility overall.
If you want to repay/foreclose off the loan you have taken sooner than the allotted time, look for the full and partial prepayment provisions. Many lenders charge prepayment fees (up to 5% of the balance plus service tax), but some don’t let borrowers prepay loans.
3. Find the best interest rate
There are multiple lenders offering online loans to eligible candidates. So, if you have a good borrowing profile then make sure to spare some time in researching different lenders. Check the loan offers online and compare their interest rates. If you have a stable job and good credit score, then you can also negotiate with your lender for lower interest rates. Online loans through loan apps often offer better interest rates than conventional lenders.
4. Review your repayment plan
Before applying, review the repayment plan because some banks and financial institutions require a certain number of EMI payments to be paid before you may make a prepayment.
Also, the EMI must fit into your monthly budget comfortably. You should also consider unforeseen situations like a job loss, medical emergencies or other financial crisis and have a back up plan to handle these.
Availing a salary loan to plan a summer trip is not a bad idea, given you know your finances well. Having the right financial knowledge can help you save big while living your best life. Invest your earnings in high return schemes and avail short ticket loans to fulfil your aspirations. This will help you build wealth and establish your credit profile. But make sure to do the right calculations and always make an aware and informed decision, choose the right lender and keep your loan amounts and tenure as low as possible.