Many of us dream of visiting famous or popular travel destinations across the world, but we can rarely afford to do so. Overseas trips are usually too expensive for our pockets, which is why many travel enthusiasts look for outside funding in the form of travel loans.
The availability of instant travel loans makes it easy for you to pack your bags and take off to your dream destination. But is this a good idea? Let’s explore the pros and cons, as well as different funding options to consider.
Should You Borrow Money for Travel?
The answer really depends on a number of factors. Ask yourself the following questions:
- How important is travel for you?
- Are you willing to wait a few years for it?
- In the future, will you regret not having done it?
- Will you meet the qualifications required for a loan?
- Can you stay committed to making repayments on time?
Some may advise against borrowing money to pay for travel, but only you can put a value to the memories and experiences you will collect!
4 Smart Ways to Finance Your Travel Dreams
If you’re looking for ways to fund your travel to an international destination, here are some options to consider:
- Save Aggressively and Early – You will need a lot of money for an international trip, so saving ‘what you can’ isn’t going to cut it. Set up a recurring monthly deposit into your travel saving fund, and put unexpected windfalls into that account as well. If you start saving now for future travel plans, you’re likely to reach your goal faster.
- Apply for a Personal Loan – If you can’t put off your travel plans until you’ve saved enough money, get a personal loan for travel. This allows you to make your travel dreams a reality now, while spreading out the cost over an extended period. You can also apply for a travel loan, which is a type of personal loan designed specifically for travelers.
- Look for Operator Financing – Many travel operators partner with banks or NBFCs to offer travel financing plans. You can use these to pay for tickets, stay, food, sightseeing and other travel expenses. Interest rates for these schemes are usually similar to those for personal loans and instant travel loans, with a repayment period of 1-5 years.
- Use a Credit Card for Travel – If you have an international credit card, you can use it to pay for travel-related expenses such as tickets, accommodation and meals. Some companies also offer travel credit cards for frequent travelers. However, a credit card can be more expensive than a travel loan because of high interest and currency conversion rates.
If you’ve been working hard without a break, heading to an overseas destination certainly comes as a well-deserved treat. Just make sure it won’t leave you with a mountain of debt you will struggle to repay!
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at [email protected].