Everyone in this world like to travel. However, some can afford to do so on a regular basis while others keep on postponing it for a future time that never comes. It is all about money you need to travel and this amount of money may vary due to several factors such as:
- The place you want to travel to
- The number of people travelling with you
- The type of accommodation, modes of transportation and food you prefer and of course
- The time of your travel, peak or off-season.
Few adventurous people still travel even if they do not have the money to do so. They take out a travel loan either from a bank, which is hard to get as they have very strict requirements or from other alternative sources such as the private money lenders and online sources.
Usually, these alternative sources have a comparatively less strict eligibility requirements as you may find from sites like Libertylending.comand others if you wish to take out any type of loan from them. Few of these lenders may even give a loan if you have a bad credit.
Credit card or personal loans
In this present day, everybody in the world owns multiple credit cards from different banks. This has eased the accessibility to funds when required and most people use this plastic money to travel as well. However, this is a risk proposition as there are several factors that may not only raise the cost of such loans but may also hurt your credit if you do not pay back the money within the stipulated time, which is very short in fact.
Taking out a personal loan on the other hand for travelling can prove to be a far more reasonable and affordable option due to several good reasons such as:
- The rates of personal loans are comparatively much lower than the credit card loans and hence your monthly bills will be much lower and more manageable
- The time you get to repay a personal loan is much more than the time you get to repay a credit card loans and
- You can also choose between a fixed rate or a variable rate personal loan according to your affordability and preference but no such choice is available in credit card loans.
All these facts make a personal loan a much safer option to choose as this will help you to reach to your short-term goals much easily, whether it is for your travel or for your financial health.
However, this does not mean that you can approach a bank for a personal loan right away. You will need to approach sensibly so that you are benefitted in the end. Moreover, banks are very strict with their loaning policies and consider the yawning gap between aspirations and reality.
Understanding a few facts
Therefore, you must be smart enough to take out a personal loan more responsibly so that you can make the most out of this tremendous opportunity. Do not go ahead without making sure that you have understood all of the following:
- A travel loan is nothing but a personal loan wherein you borrow a certain sum of money to fund your holiday especially instead of any other upcoming expenses. Just like any other personal loan, when you take out a travel loan you also have to agree to the terms and conditions of the lender including paying back the amount on time with interest and any other allied fees according to the agreement and your repayment schedule.
- This specific personal loan will however not have the added benefits of a credit card such as purchase protection, warranties, travel benefits, reward points, and others.
- The rate of interest charged in a personal loan is relatively a lot lower than that of a credit card. You can also borrow a lot more in a personal loan, according to your credit. The time taken for you to become debt free will also be much more than a credit card loan which means you can easily factor your repayments into your monthly budget.
When you take out a personal loan, you canuse the personal loan calculators before taking it out to calculate the amount of your monthly payments as well as then amount of time it will take to pay off the loan completely with interest. This will enable you to look for other options, if any, to make extra payments and get rid of your debt quickly.
However, if you are more willing to use your credit card than taking out a personal loan simply due to the benefits that it offers such s reward points and insurance, you must make sure that you use it sensibly as well. This does not mean you will use it less but it means that you should focus on using your credit card and still enjoy the benefits of a lower rate of interest and a longer time to repay your credit card debt.
The only and best approach to do so is to consolidate your credit card debt with a personal loan once you are back home. However, here are a few things to do and consider in order to make this possible.
- You must organize your personal loan application before you start your trip so that you are sure of getting an approval when you come back and
- You must know the exact amount of approval so that you can use your credit card within that limit.
At this juncture it is also important to remember that approval for such a loan will normally be valid up to two months so long as the circumstances of approval and application does not change.
Summing it up
It is vital to remember that the money lender giving you the money to travel will not be interested in how you enjoyed the trip but will be more interested in getting it back from you. Therefore, do not borrow if you do not need the money even if personal loans are very tempting. Lastly, review your finances to find a loan that is right for you.
