Are You Applying for Holiday Loan? Here are 5 Things You Need to Know
Are You Applying for Holiday Loan? Here are 5 Things You Need to Know
Most of the time, we come across a situation where we randomly prepare an international travel plan. However, we do not have sufficient funds for it. At that time, availing of a holiday loan is the best option to book your journey to the desired destination. Catering to such needs, various banks in India offer personal holiday loans, both for domestic and international holidays. The interest rates of these unsecured loans vary depending on the lender you opt for and start at 11 per cent. Holiday loans provide the customers with the ease of finance that helps one fund their travel without over-utilizing their credit cards. While planning an international trip and availing of a holiday loan, most forget about the international travel insurance policy. Hence, it is advisable to look out for the best travel insurance in India, which will safeguard your trip and provide coverage against loss due to theft, luggage delay, medical emergencies, etc. Let us look at essential pointers to note while availing of a holiday loan.
5 points you should keep in mind before opting for Holiday Loan
1. Loan Amount:
While availing of a holiday loan, experts suggest people should borrow only the much they require. Borrowers should borrow as per their repayment capability and not go overboard. One should also assess one’s financial needs when choosing the loan amount. The loan EMI shouldn’t exceed 50 per cent of one’s salary, and one should maintain a low debt-to-income ratio.
2. Loan Tenure:
When choosing the loan tenure, borrowers should be careful as the loan interest rate will be higher for shorter loan tenure. However, you will pay more in overall interest payment with longer loan tenure. Therefore, one should take the help of a loan EMI calculator to decide the tenure for their loan. This will give you the best results in lower interest payments.
3. Plan Expense Budget for your Holiday:
It is essential to create a holiday expense budget, and one should stick to it that they would not overspend and have control of their spending limit. Most people spend a lot on an international trip from tickets and accommodation, transport, and food. Hence, it is vital to have a budget before going.
4. Repayment of Loan:
Borrowers should choose a bank that offers flexible loan repayment options. Before applying for a personal loan online, one should also carefully go through the repayment clause. On the outstanding amount, some banks charge foreclosure and prepayment fees.
5. Insurance coverage:
Get the best travel insurance in India to cover accidents, hospitalization, theft or loss of luggage and travel documents. In addition, HDFC ERGO offers an international travel insurance policy for individuals, students, frequent flyers and families. With HDFC ERGO, you get broad coverage of 1lac plus cashless hospitals.
Conclusion
Next time you are taking a holiday loan for your trip, it is advisable to note the above-mentioned pointers. Also, unforeseen incidents can happen without any warning; hence, it is safe to get a travel insurance policy for the journey so that you don’t have to bear the losses arising from theft, luggage loss, flight delay, COVID-19 hospitalization, etc.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
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