Personal loan to take a dream vacation
Are you short on cash to go on your dream vacation in India or around the world? A travel loan under the umbrella of a personal loan will be the best option to finance your trip. An increasing number of people, especially the young generation, are getting a personal loan to meet their travel expenses.
About travel loan
A travel loan is a type of personal loan designed to fund expenses incurred for travelling. Like any other personal loans, travel loan is offered to meet your short term financial needs, in this case your vacation. With much cheaper rate of interest rates than credit cards, Aditya Birla personal loan for travelling is a wise option to fund your holiday. Various banks and financial institutions offer personal loans for your travelling expenses.
Why opt for a travel loan?
Lower rate of interest: Interest rates charged for a personal loan (10% to 18%) are considerably lower than that on credit cards (2.5% to 3% per month).
Simple Application Process: Now with the help of online application and disbursal services, it is fast and simple to get a personal loan. Nowadays personal loans are approved in minutes and disbursed in a week.
Flexible Repayment Tenures: Many lenders offer a personal loan for a flexible tenure ranging from 12 to 70 months even without prepayment charges. Hence you can take the benefits of choosing your repayment cycle.
Collateral Free: A personal loan is an unsecured credit i.e. you don’t need to submit any asset as collateral or security.
Key points you should have in mind while applying for a travel loan
Right loan for you: You need to undertake research to figure out the personal loan that is right for you. People tend to compare rate of interest from various lenders. However, you should also compare other charges like processing fee, pre-payment charges and associated monthly fees.
Don’t borrow beyond your repayment limit: You must consider your repayment capacity while applying for a personal loan. Your equated monthly income to net monthly income (EMI/NMI) ratio should not exceed 50%. Never miss on any payment. Missing a payment will affect your credit score negatively.
Repayment schedule: It is advisable to go through the repayment schedule before signing up. Some of lenders prescribe a minimum number of EMI payments that should be made before you pre-close your loan.
Travel loan eligibility
Any individual Indian citizen or national having residual income can apply for a personal loan. As Axis Bank personal loans are unsecured loan, applicant does not need to furnish any asset as collateral. You need to fulfil following criteria to apply for a personal loan.
- Credit score: Credit score is one of the most important factors to determine personal loan eligibility. A credit score of 750 or above is known as a good credit score. However, some lenders also consider a credit score of 720 or above.
- Income: Income criteria vary from lender to lender. A personal loan applicant must have a minimum earning defined by the lender.
- Age: Age criteria also vary from lender to lender. Generally, for salaried individual, age should be between 21 to 60 years. Whereas, for self-employed it is between 25 to 65 years.
Documents required for a travel loan
Documents required for salaried individual are as under:
- Identity proof: One of — Aadhar card/ voter identity card / passport / driving license / PAN card
- Residential proof: One of — telephone bill / electricity bill / water bill / rent agreement etc.
- Income statement: Salary slip along with bank statement showing salary being credited into account for last three months
- Employment proof: 2-year employment continuity documents along with at least 1-year employment in current company
- Photographs: Two passport size photographs
Document required for self-employed person are as under:
- Know your customer (KYC) documents: Identity proof, residential proof, date of birth proof
- Residential proof: Utility bill like electricity bill, water bill or telephone bill for last three months
- Office address proof: Proof of residence or office ownership is mandatory for self-employed individuals
- Proof of continuity of business: Testimony showing that the business is being run for certain time is an essential part of documents
- Income proof: Audited financial report for the last 2-year
- Bank statement: Bank statement business for the last six months is necessary
Interest rate and charges Interest rate
Rate of interest is one of the most important factors buyers should consider while applying for a personal loan. Rate of interest varies from lender to lender. Generally, interest rate ranges between 10% to 36%, depending on multiple factors like credit score, employment type, income of the candidate etc.
It is advisable to check the other charges like processing fees, late payment fees, prepayment fees etc.
Hence, whether it is planned or spontaneous vacation, it could be more expensive than we estimated. A personal loan for traveling comes to your rescue when your expenses exceed your budget.
Originally published at https://voticle.com.