Travel Loans have many benefits. Apart from making travel affordable into monthly payment option, it helps one manage their cash flow and makes the dream travel available to all. But before you ask your travel partner for details on your travel loan, there are a few things you should keep in mind:
1. Revisit your existing financials
Before opting for a travel loan, do check your current financial situation. Most of the financial institutions providing a travel loan, keep a track of a couple of things before providing a loan to you. This is primarily to ensure that you will be able to repay the loan. Things like, Do you already have a number of loans or mortgages running? Will your current salary help you meet the monthly payments? Do you have a good credit score and repayment history?
2 Best is to ask for the amount you need
Getting a travel loan today is fairly easy. Hence, it can be enticing to go for a higher loan amount than you actually need. However, you should remember that higher the loan amount, more the interest rate. This will also lead to a higher repayment amount. Hence, only opt for the amount you need and don’t go for any extra amount.
3. Go for the best interest rates
The interest rates for travel loans differ from financial institution to financial institution. The interest rate is determined by financial institutions based on a couple of factors like:
• Travel information
• Your profession
• Current salary
• Income stability
• Work experience and company category
• Age
• Existing loans and EMIs
• Credit score
Based on the interest rate, you will be able to calculate your EMI.
4. Opt for your repayment term wisely
Make a smart choice of opting for the term which best suits your travel needs. A very long term may invite more interest, and a very short term may make your monthly installment heavy on your pocket.
5. Keep all the documents handy.
Before you go in for a loan, find out the required documents and other formalities needed. It is best to keep these documents handy at the time of application. Some of these include:
• Documents declaring your source of income,
• Identity proof,
• Travel plans,
• Residence proof
• Bank statements and others
6. Go through the loan agreement carefully.
It is best to read the loan agreement in its details before signing. That way you will know of all the fees, charges, as well as penalties you may be subjected to and will not be caught off-guard.
7. Find out about the deferment process
In case you happen to miss an EMI or are unable to pay your travel loan due to unforeseen circumstances like a loss of a job, financial emergency etc… it would be best to know the deferment process in this case to handle the situation better.
