Many of us dream of traveling to different places, but financial constraints often hold us back. The good news is, you can now fulfill your travel dreams by taking a travel loan.
Yes, you read it right! Banks are not only offering personal loans for domestic but also international travel.
In the first six months of 2023, every fifth person who took a personal loan used it for vacationing, highlighting the popularity of travel loans.
What is a Travel Loan and How to Get One?
A travel loan is essentially a type of personal loan designed for specific travel purposes. Most lenders in the market provide travel loans for both domestic and international trips.
The best part? Unlike other loans, you don’t need to provide any collateral to secure a travel loan.
Application Process and Requirements
Applying for a travel loan is simple and can be done both online and offline. To apply, banks may require documents like proof of identity,
address proof, travel insurance, booked tickets, and travel itinerary. These details help the bank understand the purpose and plan of your trip.
Interest Rates and Loan Amounts
Crunching the Numbers
Interest rates on travel loans vary between lenders. Currently, HDFC Bank offers travel loans at an interest rate of up to 10.50% per annum.
With HDFC, you can borrow up to ₹40 lakhs and repay it within 60 months. Tata Capital, another prominent player, offers travel loans at an annual interest rate of 10.99% and allows a repayment period of 72 months for loans up to ₹25 lakhs.
Axis Bank is also a viable option, offering travel loans up to ₹15 lakhs at an interest rate of 10.25% per annum, with a repayment period of 5 years.
Popularity and Eligibility Criteria
Who Takes Travel Loans?
According to a survey conducted by online loan platform Paisabazaar, one out of every five personal loan customers between January and June 2023 used the loan for travel purposes.
Travel loans are particularly popular among salaried individuals, comprising 74% of the borrowers.
Self-employed professionals constituted 14%, while businessmen accounted for 12% of the total travel loan applicants.
So, if wanderlust has been nudging you but your wallet has been pulling you back, a travel loan might just be the ticket to your dream vacation!