Let The Travel Loans Fund Your Luxury Vacation Instead of the Enticing Credit Cards

You can borrow responsibly by opting for travel loans that come with better cash flow management tools are opting for loans

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Indian millennials are waking up to a new kind of consciousness on the back of improved financial health of the country and growing income opportunities. They are seeking authentic travel experiences in their bid to explore and see the world and are using multiple innovative payment options to pay for this experience without a big hole in their pocket. A majority of vacationers end up spending more money than expected while travelling as they often rely on credit cards for all the holiday expenses. Little do they know that piling up excessive credit card debt without a plan to pay it off could affect their financial health and future credit status. After all, everyone wants to come home from vacations with blissful memories instead of unmanageable credit card bills.


What Makes Credit Card a Poor Option for Travelling?

While credit cards are a great financing option for meeting short term goals, using them for vacations can be quite conflicting. To begin with, a credit card is a standalone product offered as a marketing tool by financial institutions to acquire customers and basically has no specific purpose attached to its usage, this means users can use it for anything even if they don't need it. This results in uncontrollable usage, which can be an expensive affair after the initial moratorium of 30 days. Moreover, the interest rates are also significantly on the higher side. For instance, credit card roughly charges nearly 3% per month on repayment after the first 30 or 45 days of credit.

Credit card limits are generally assigned or increased over time basis a customer's usage and repayment behaviour. This can sometimes result in non-availability of sufficient credit limit on the card for usage on travel purposes. On an average, credit limit given on the cards in India is INR 45,000 whereas the average ticket size for travel currently is INR 100,000.

Furthermore, for credit card users, the merchant/travel agent servicing them by accepting their cards are actually loading them with all costs which are levied on a particular transaction with no advantage. With so many hassles associated with credit card usage, clearly, it isn't a stress-free the idea for financing your dream vacations to foreign lands.

Travel Loans- The Perfect Solution to Satisfy Your Wanderlust

While saving is the most common practice among the Indians for planning their dream holidays, they are planning their holiday just the way they plan their investments. Even though many don't have enough savings for better travel experiences and visit finer destinations, they can borrow responsibly by opting for travel loans that come with better cash flow management tools are opting for loans.

A travel loan is a financial product available for anyone and every one, one doesn't need any card or pre-approved limit beforehand. Unlike credit cards, it is applied along with the primary product that is travel and that too if and when required. Just like your car loans, home loans, or any durables loan, travel loans serve a similar purpose of defining a purpose. This further helps the customers to maintain financial discipline and manage their funds better.

Meanwhile, due to identified usage, banks and new-age lenders are able to take a better risk on customers and thus are able to offer cheaper products to travellers for fulfilling their wish. In fact, the digital lending space is enabling easier access to travel loans, even to those with No credit history. With travel as a purpose, customer can buy his or her primary product financed at an extremely low- or ZERO interest rate. Typically, travel loans are available anything from 0% to 1% per month with a choice of repayment ranging from 3 months to 24 years, emerging as the best cash flow tool indeed. Moreover, since travel loan is agnostic of any preapprovals and usage, banks and NBFC are able to offer travel loan almost equivalent to the requirement,(as they are offered at the point of purchase). One simply has to choose the travel package via a travel website or a travel agent physically, choose the payment option, apply for the loan application, receive instant approval, get the booking confirmation and leave for the trip. The financing service is available with the travel dealer, eliminating the need for approaching any third party. New-age digital lending companies are making it even more convenient by allowing the customers to get the paperwork done digitally in one go so that the focus remains only on creating travel experiences and memories.

The verdict

Vacations are big-ticket purchases and with day-to-day expenses increasing steeply, using credit cards with whopping interest rates for the purpose of travelling is only going to lead to financial stress later on. While every destination may not seem affordable, the high expenses should not be a hurdle in experiencing them or executing last-minute holiday plans. After all, that's what travel loans are here for.