Travel can be expensive. Especially when you are planning to take an overseas trip. The travel cost itself is quite substantial and then there are all other costs like hotel, local travel, tickets for entries for various entries, hotel terrify among others. And if you had planned to take a trip to a nation of your choice and the falling rupee value against the dollar has become a spoil sport, do not hold back your desire. There is a travel loan that will come to your rescue and you can repay it over a period of time. Let us understand more about this loan product.
What is a travel loan?
The travel loan is what will help you raise fund for vacation within India or even outside India through a hassle free process. This loan helps you not to burden yourself with over spending or maxing out on the high interest credit cost available through the credit cards.
While some people say that there is no product as a travel loan but the fact is that a few banks do market this variant of credit. A few pandits are of opinion that an ICICI personal loan or any other personal loan is basically what the travel loan is. However, lending institutions like HDFC, TATA among others are specifically funding the cost of travel.
What is the interest rate for this loan?
The interest rates on the loan may vary from about 11% to 21%. Even the term of loan is quite flexible. While a few lending institutions may agree only for a 12 month term, there are others which are offering the loan for a term of up to 60 months. So you can chose the repayment term that suits you the best.
What documents are needed to apply for a travel loan?
Like any other loan the bank will follow the process of evaluating your borrowership through your capacity to repay and the CIBIL score that you would have at the time of applying for such loan. The documents that you would be required to furnish would be your bank statement, income documents apart from the PAN details, Adhaar or any other KYC document that the lender may ask for.
Amount that can be funded?
The amount while can vary from person to person, as a thumb rule a loan up to 80% of the travel costs get funded. The maximum limit that any bank may agree for funding could go as high as 25 lakh. So in respect to the amount, the funding is quite liberal but the borrower must have adequate capacity to foot regular repayment every month. A debt to burden ratio of 50% would continue to be applied to calculate the eligibility as would be in any other loan product.
Benefits of taking a travel loan
The personal vacation loan can be an attractive option for the travelers because of the following reasons:
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