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(Source: www.parents.com)

You do not have to delay your dream vacation any longer. Just like you may purchase a home or car with a loan, you may enjoy your holiday by availing of finance. Most banks and non-banking finance companies (NBFCs) offer loans to enable you to take a vacation.

Here are two vacations you may fund through a loan.

  1. International holiday

With personal finance, you may take your dream holiday abroad. Whether you want to explore the South American rainforests or enjoy the Sicilian countryside, a personal loan is beneficial. These types of loans are available foran amount between INR 50,000and INR 10 lakh.

  1. Domestic vacation

India has numerous unexplored gems that may be an amazing holiday experience. You may cruise to the Andamans, explore the Himalayan foothills, or enjoy a guided tour of Jaipur using these loans.

Here are four features of such loans.

  1. Unlike a home or car loan, these types of finance are available without any security. This ensures you do not risk your personal asset in case you are unable to repay the loan on time. However any delay in repayment will have negative impact on your credit score.

 

  1. Repaying the loan amount is easy. This is because you may choose tenures between one and five years. Furthermore, the personal loans’ interest rates are competitive, which ensures you do not face any difficulty in servicing the EMI.

 

  1. Lenders often complete the entire procedure from loan application to approval within a short period of time. In addition, it is easy and hassle-free to apply forsuch a loan because minimal documentation is required. You need to submit an identity and address proof along with bank statement and post-dated cheques (PDCs).

 

  1. Lenders provide you with the option of repaying the loan amount before the end of the duration. This option is often available at a nominal foreclosure charge at the end of six months since the loan disbursement.

Most financial institutions levy a processing fee of up to 2% when you apply for a personal loan. Furthermore, a common belief is that such loans are expensive due to a higher rate of interest. However, these loans are available at competitive rates and have several benefits.

Here are three benefits of funding your dream vacation with personal finance.

  1. You may consider using your credit card to pay for your holiday. However, credit card companies levy a higher interest rate, which makes it an expensive option. Furthermore, using a credit card reduces the available credit limit. These limitations are not applicable when you choose a loan to fund your vacation.

 

  1. Your credit score is significantly impacted if your credit card balance exceeds 30% of the available limit. Such negative implications on your credit score are not applicable when you fund your holiday with a loan.

 

  1. The loan amount is repayable as per a pre-determined EMI schedule. This makes it easier for you to account for this installment in your monthly budget.

Using a loan to travel has many benefits. However, like other loans, you need to be cautious while availing of personal finance. You must set a budget to ensure you do not face liquidity crises or fall into a debt trap.Choosing a flexible repayment schedule is also beneficial. Finally, you need to read all the terms and conditions of the loan agreement to prevent any issues in the future.

You may avail of these loans either from a bank or an NBFC. Furthermore, you may avail of personal loans online, from the comfort of your home. Online application is a quick and convenient option.