Travelling is one of the best ways to keep your mind refreshed. If you wish to travel around the world while not having sufficient money at the moment, a personal loan or travel loan in India will come in handy. Such a loan will assist you in managing your expenditures wisely and enjoying the trip without having to worry about the expenses. This loan can be unsecured, which means you are not required to provide any collateral against it. Furthermore, a personal loan will provide you with substantial financing, using which you can use to plan a vacation or business trip for yourself, your family or your colleagues, both in India or abroad. To make it more accessible, several lenders provide longer loan terms and reasonable interest rates.
Before taking a decision, you must compare the loans available from different lenders based on their interest rates, repayment tenures, etc., and choose the best option that suits your needs. Before applying for a travel loan in India, you must also keep a few points in your mind as they will aid you in making the right decision.
Here are five important tips that you should follow.
- Make a Budget and Borrow Accordingly
While acquiring the loan amount, make sure to borrow only the required amount as per your decided budget. By doing so, you will be able to easily repay the loan amount without being financially burdened. It will also avoid any kind of impulsive purchases or overspending during your trip. Failing to make EMI payments on time will hurt your credit score. It may hamper your ability to take loans in the future. Hence, while applying for a loan, it's necessary to plan your expenditures well in advance. You can also use the personal loan EMI calculator to know the precise amount of your monthly EMIs. You can find this online tool on any financial institution’s website.
- Look for Low-interest Rates Loan
The interest rate that lenders charge for personal loans is the main component of your borrowing costs. Different lenders offer personal loans at different interest rates. The cost of borrowing increases when the interest rate on a personal loan is larger. You must do a thorough comparison between them before taking a loan.
- Choose the Right Repayment Tenure
Another point you must remember while applying for a personal loan is its repayment tenure. Your monthly EMIs are influenced by your repayment period. Your EMIs will be lower with a prolonged tenure, but your overall interest payments will be higher. As a result, even though your monthly expenses may be reduced, your overall loan payments will turn out to be more expensive. Hence, you should pick the payback period only after assessing what best suits your needs and your financial situation.
- Evaluate the Associated Benefits and Features of the Loan
Different financial institutions offer different advantages and features with their loan products to make them more user-friendly. These can include pre-approved deals that streamline the borrowing process and provide quick access to funds for your trip.
- Maintain a Good Credit Score
To acquire a personal loan at a low-interest rate, you need to have a good credit history and an excellent credit score. Your credit score shows your creditworthiness and financial health. Thus, lenders have more faith in customers who have a history of timely loan repayments. Your ability to get a higher loan amount at competitive rate increases if your credit score is 750 or higher.
Now that you've learned these essentials, you should be aware of the different factors that may impact your personal travel loan eligibility.
Factors Affecting Personal Loan Eligibility
Your eligibility for a personal loan may be significantly impacted by the below-listed factors:
- Annual Salary
Your eligibility for a personal loan is heavily influenced by your income from economic activities like owning a business or working a job.
- Type of Residence
The type of residence you have also plays an important role in determining your eligibility for a personal loan. The lender will ask if you are in a rental or owned flat, so they can better understand your financial commitments.
- Your Company/Organisation
When establishing your creditworthiness, your company's reputation is also considered.
- Debt-to-Income Ratio
The debt-to-income ratio states the proportion of how much you owe the lenders to how much you earn. This assists the lender in determining if you are capable of handling another loan.
- Credit History
Your credit history shows your approach to financial commitments and acts as proof of your financial management skills. Moreover, you may also use a personal loan eligibility calculator to assess your eligibility. This online tool is free to use and readily available on lender websites.
Here are the steps to follow.
- Visit any of the lender websites and navigate to the loan eligibility calculator.
- Select if you are a "Salaried" or "Self-Employed" individual.
- Choose "Net Monthly Income" and "Monthly EMI" as expected.
- You will be shown the amount of personal loan you are qualified for.
A personal loan is the most effective way to arrange funds if you are in need of quick cash for travel. With the help of the previously mentioned details, you may make a more educated decision about taking a travel loan in India. However, before applying for a loan, you should review your personal loan qualifying conditions to avoid rejection and ensure a smooth application process.
FAQs of Personal Loan for Travel
- Can I obtain a personal loan without providing salary slips?
Yes. Since a personal loan is generally unsecured, no security is required. However, you can use any kind of collateral to obtain this loan if you are unable to present your pay slips. You can win your lender's confidence by doing this. Since they are aware that they can take and sell your collateral to lower the risk of default, the institution will be confident in the loan repayment.
- Is there any amount restriction on a personal loan?
Each lender offers a different value as a personal loan. Hence, the amount of the loan will be dependent upon your lender.
- Can I get a personal loan at a low-interest rate?
Yes. By maintaining an excellent credit score i.e., 750 or above, you may get it at a competitive interest rate.
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Disclaimer: This content is part of a marketing initiative. No TNIE Group journalist is involved in the creation of this content.