Personal loans can be taken for other reasons as well which include leisure and travel. Today, a lot of banks and financial institutions offer something called a ‘travel loan’ or a ‘vacation loan’. This loan is taken specifically when there is an international trip involved where the expenses are very high.
What is a travel loan?While the fundamental concept behind a personal loan and a travel loan is one and the same, the ease of approval is what distinguishes a travel loan from a personal loan. Also, disbursal is faster in some cases for a travel loan. The other features remain the same which include –
- Loan tenure of 12 to 60 months
- Interest rates of 5-20% depending on the loan amount and income eligibility
- Minimum documentation
How to make a travel loan estimate?So how exactly does one go about planning how much money they would require for their travel? We can help answer that! Here are a few steps to take to arrive at your travel budget estimate –
- Finalize destination: Research your destination and figure out how much is it going to cost for the mode of transport, accommodation, food, ad hoc expenses, shopping etc. and make a list of things you would be spending on.
- Research on the destination: Spend some time reading up about the destination to get an idea of how expensive it is. This will help you get a general idea about how much cash/money you will need to spend.
- Create a trip budget: The next step would be to make a list of possible expenses that might come your way and add a budget to it. This will help you determine a total budget and also keep your expenses in check.
- Account for your savings or available funds: After having figured out how much the trip is going to cost you, see how much funds do you have with you and arrive at the deficit. This deficit will be the loan amount you can apply for.
Here’s an example that will help you understand better –
Meera wants to go on a trip to Italy for 15 days with her family which consists of her parents and her younger brother. The total trip including flight tickets, accommodation and food will cost Meera INR 8 lakhs. She has accounted for another 2 lakhs for ad hoc expenses and local travel as well. She has savings which amount to INR 2 lakhs for herself and her family and is facing a shortage of 8 lakhs. Meera can apply for a travel loan in order to meet that shortage and go on an enjoyable trip with her family.
Learn more about your Personal Loan Eligibility here
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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