December is one of the most preferred months for a vacation in India as the snow covers the country's northern parts and the hot places become pleasant. Besides, most people save up their leaves for this month to head to a destination of their choice to ring in the new year.
While taking some time off from work to travel is something that all of us want, the break can be quite heavy on our pockets. For some, it is unaffordable.
To ensure that money is not a barrier to enjoying your ideal holiday, numerous well-known lenders in the market now provide travel loans.
What are travel loans?
Travel loans are personal loans that are not secured by collateral, such as your home or car. You have the option of selecting a loan in a certain amount with a set interest rate and periodic installments of that amount of money.
These are the unsecured loans that are only granted depending on the borrower's credit score and capacity to repay the loan. If the applicant's credit score is excellent, they may be able to negotiate a low-interest rate.
What are the key features of a travel loan?
- A credit score of at least 750 is often required by the bank for personal loans and other unsecured loans. In general, no guarantors are required to prolong the loans, however, the bank may want a guarantor or collateral if the travel loan is for more than Rs. 2 Lakh.
- The loan is disbursed in accordance with the requirements. A cost estimate for the full journey can be obtained by the borrower, who can then apply accordingly. Many of the providers of holiday packages frequently have connections with different banks. The applicant can submit an application to one of these banks, where the payout and documentation will go easily.
- The processing charge is determined by the bank in accordance with its rules; however, where there exist agreements with travel package sellers, extensive due diligence is not necessary, so the bank may either give the loan for 0 percent processing cost or at a reduced rate.
- The length of the payback period might be anywhere from 12 to 60 months. Travel loans can be granted as personal loans with payback terms ranging from 3 to 6 months.
Many banks may not classify travel loans as international or domestic travel loans. The amount of the loan may be determined using the applicant's credit history and income. In this scenario, the borrowed money may be applied to both local and international travel.
Each bank could have its own set of requirements for eligibility and rules governing unsecured loans, including travel loans. The candidate must fully comprehend the need and submit an appropriate application accordingly.