Travel Loan Benefits: Tax Deduction, CIBIL Score & EMI

Travel Loan Benefits
Travel Loan Benefits

Travel loans are nothing but personal loan taken for the purpose of travelling or going on a vacation. Most people want to secure a travel loan for their holiday breaks. However, the process to apply for a travel loan is not that cumbersome.

 Borrow your travel loans from Buddy Loan explore the benefits of lowers interest rates, increasing your CIBIL score and loan repayment options from this loan aggregators.

A travel loan is…

A travel loan is a relatively new concept in the field of banking and financial sector. In the domain of personal loans, there is a category of loans given for the purpose of travelling. This loan is for domestic or foreign travel. With the era of globalization and liberal markets, backpackers and couples, family vacations across continents have increased.

This familiarity with the entire market area of the world by the tourism and hospitality sector has made it possible for banks to start creating travel loans. To enable the possibility of people with fewer funds to take EMI loans and pay sums of money for a long trip abroad easily, many private banks, namely, HDFC, Axis, ICICI, Tata Capital, Bajaj Finserv have started giving out these loans.

Standard rates on these loans include a processing fee, prepayment charges and of course the varying interest rates based on the CIBIL score. They are given out, for salaried, eligible customers in short periods of time, sometimes as short as 10 seconds.

The amount, Interest rates and duration

Loan ranging from Rs 1000 to 15 lakhs are generally disbursed. The interest rates begin from 11.99 %p.a. And the tenure for repayment is 6 months to 5 years.

CIBIL

The importance of CIBIL scores in the availability of any loan, including travel loan is always very high. CIBIL scores when good, allow a great deal of relaxation by the bank to the concerned person in getting the loan amounts. Also, CIBIL status also improves or decreases proportionately to nature, interest and principal loan amount when paid back by the borrower.

Repayment

While a salaried person will find taking and paying the loan from his salaried account easy, the others who may obtain the loan by submitting ID proofs, address proofs, photographs and income proof by forms like income tax return slips.  

Travel loans are a form of personal loan, there are a must be a careful evaluation of the total budgetary requirements for the travel, the capacity to repay through EMI and consideration for the interest rates involved that fall in the same category as personal loans.

Getting a travel loan!

There are a few eligibility criteria that need to be fulfilled before you can be granted a travel loan.

Such criteria differ from one financial institution to another. However, there are a few common eligibility criteria that are generally considered. They are as follows:

  1. The borrower must be at least 21 years old.
  2. The borrower must either be a working professional who has been in the job for at least 6 months before applying for such a loan, or the borrower must at least be a self-employed person with a steady income.
  3. The person applying for the loan must have a good credit score. The minimum credit score required differs from one lending institution to another. However, approximately 700 is considered to be a good credit score.
  4. There is also an income criterion that is to be satisfied by the person applying for the loan.

Documents required

The documents that need to be submitted for attaining a travel loan also vary from one lending institution to another. However, a few documents are essential to be submitted before you attain a travel loan. The documents include:

1)         Identity proof

2)         Address proof

3)         Income proof

4)         Passport-sized photos

5)           PAN card

Applying for a travel loan:

The online era has enabled us to apply for a travel loan in a simple manner. Following are the steps to follow while applying for the loan:

1) Visit the websites of all money lenders that provide travel loan.

2) Compare the terms and conditions mentioned in each website for the application of loan and analyze the ones that are best suited for you.

3) Fill your personal details on that website for the application of travel loan.

4) Submit the documents that are asked for in the application.

5) Call customer care to understand the process of approval.

6) You will then receive an SMS or phone call if your travel loan is approved.

OR

You may visit one of the branches of the lender’s institutions where you seek to secure, you’re a travel loan, and then you will be assisted in the process by the concerned department.

Therefore, applying for a travel loan is not complicated. However, you can consider other alternatives like your savings or recurring deposit account for spending your holiday-break, instead of a loan that requires you to pay some interest amount from time to time.

EMI calculation for a travel loan

EMI refers to the monthly payments that the borrower makes to the lender for the repayment of the loan amount. After the borrower receives the loan amount from the bank / NBFC, he/she has to repay the loan amount slowly by paying a part of it back to the lender. This payment is known as EMI. In fact, one of the loan aggregators, Buddy Loan offers good EMI options and better loan repayment tenure. There is more to benefit the CIBIL score that will help you in future irrespective of the loan (secured & unsecured) you avail. 

For personal loans, such as travel loans, the interest rates are higher than other loans, but not the highest. Travels Loans are made easy for the purpose of covering travel expenses if the borrower’s salary account is held for a long time in a private or public sector bank.

In these banks, there are not only an easy disbursal but also several charges that get levied in the process of sanction and recovery of the loan amount. These are over and beyond the principal amount and the interest charged over it – in the form of EMI.

These are processing charges that vary per bank and a special prepayment charge that is levied if the borrower decides to pay back the total amount due before the date and free himself of the credit period instalments applied.

Thus, for understanding any usual travel loan – there are several types of charges, principal amount plus processing fee, a prepayment charge and an interest amount.

Together these four are the common charges in most cases of travel loan. After the three variables and the principle are known the overall amount can be ascertained.

Mostly the loan sanctioned is between Rs 1000 and 15 lakhs, and the interest charged on this is at least 11.99% p.a. Also, the tenure for repayment varies from 6 months to 5 years. These figures are the most average and tentative amounts to go by. The bank and person applying can cause a change in the terms, conditions and rates of a loan greatly. The loans granted are always a matter of a banks’ understanding with the customer and they are free to change their terms as per their understanding.  

Travel Loan can benefit if, …

Travel loans are a good way to release the steam of a lot of stress that accumulates without damaging savings. The only downside for salaried employees is that the interest rates are on the higher side, however with packages of attractive discounts of foreign tours and travels, insurance policies becoming cheaper by the day and global markets tilting to all classes of travellers. It is a good option for almost everyone who wants to see the world – domestically and internationally. To be able to witness the sights and sounds that surround us all outside the spheres of the daily life may seem like a luxury, but to plan and be able to reach that may help remove business-related emotions.

Best benefits of travel loan

Travelling has the biggest benefits for the old, young and couples, parents and many more. Be it business trips or company sponsors for big trips. Half of our generation is young, and they have this passion for travelling but sometimes the only hurdle that lies between this passion is financial issues or expenses.  

Every problem has a solution and so does this. Plan your trips and enjoy carefree travel.

Easy documentation processes

Mostly, travel loans are unsecured. You do not have to provide guarantees; thus, there is no big deal if you are not able to provide any guarantor or collateral. Simple documentation is required which carries easy processes done by the banks.

Zero confusions

It is totally hassle-free. There is no specific need to visit banks or NBFCs. You can easily apply for a loan anywhere, anytime.

Repayment tenures

People are often much worried about loan tenures. Some of them are unaware and think that it is not an easy thing to pay back loans. But in practice, different agencies provide you relaxation to re-pay loan according to your desired period. They usually offer an extension for about 5 years to repay the loan, and you can choose the period.

Vivid options for repayment

There are fix EMIs to repay your loan amount monthly. Not only EMI, but there are also Multiple Repay Options which makes your life easier. As soon as your application is approved, the loan amount is transferred in your bank account within 48 hours.

Expenditure

The loan amount can be smoothly used for booking air tickets, hotel bills or another expense regarding your travel. Medical expenses are also included as health is the very first priority. These facilities can make your trip totally unforgettable. There is no limit for the use of a travel loan, whether it is a foreign trip or a domestic one you can use it to travel on any destination of your choice.

The most convenient part is, due to less documentation you can plan your travel on a very short note. Emergency travel can also happen because of simple procedures.

Travel loan for students

Student travel loans are also provided with numerous benefits to those who want to travel to their favourite destinations. If a student wants to travel but has fewer funds, student loan comes with advantages like hassle-free process, minimal documentation, quick disbursal which will help you to plan your desired trip with a lot of ease. Hence, it is very popular among students.

Important journeys  

Be it weddings, or an emergency case wherein you have to travel from far across, or a bachelor party has all got to do with travel loan. Overseas education is the most happening and driving trend for travelling these days. You can’t resist and are very eager to attend but going through short of savings these situations become complex, and you are bound to cancel. During this time, applying for a travel loan can get funds easily for your needs. Make a budget before you choose to apply.