You Can Borrow Responsibly By Going For Travel Loans With Better Cash Management Tools Go For Loans
Aug 2, 2019
5 minutes to read
Opinions expressed by Contractor the contributors are theirs.
You are reading Entrepreneur India, an international Entrepreneur Media franchise.
Indian millennials are awakening to a new kind of consciousness through improving the country’s financial health and increasing income opportunities. They seek out authentic travel experiences in their attempt to explore and see the world and use several innovative payment options to pay for this experience without a big hole in their pocket. A majority of vacationers end up spending more money than expected while traveling, as they often rely on credit cards for all vacation expenses. They don’t know that accumulating excessive credit card debt without a plan to pay it off could affect their financial health and future credit status. After all, everyone wants to come home from vacation with fond memories instead of unmanageable credit card bills.
What makes a credit card a bad option for traveling?
While credit cards are a great financing option for meeting short-term goals, using them for vacations can be quite divisive. For starters, a credit card is a stand-alone product offered as a marketing tool by financial institutions to acquire customers and basically has no specific purpose attached to its use, meaning that users can use it for any purpose. what, even if they don’t need it. This results in uncontrollable use, which can prove costly after the initial 30-day moratorium. In addition, the interest rates are also significantly higher. For example, the credit card charges about 3% per month on the refund after the first 30 or 45 days of credit.
Credit card limits are typically assigned or increased over time based on a customer’s usage and repayment behavior. This can sometimes result in the unavailability of a sufficient credit limit on the card for use for travel purposes. On average, the credit limit shown on cards in India is 45,000 INR, while the average size of travel tickets is currently 100,000 INR.
Additionally, for credit card users, the merchant / travel agent who serves them by accepting their cards actually charges them with all fees that are levied on a particular transaction without any benefit. With so much hassle associated with using a credit card, it’s clear that the idea of financing your dream vacation abroad is not without stress.
Travel Loans – The Perfect Solution To Satisfy Your Want To Travel
While saving is the most common practice among Indians to plan their dream vacations, they plan their vacations exactly as they plan their investments. While many don’t have enough savings to have better travel experiences and visit more refined destinations, they can borrow responsibly by opting for travel loans with better cash management tools.
A travel loan is a financial product accessible to all, no need for a card or pre-approved limit. Unlike credit cards, it is applied with the main product of travel and that too if and when necessary. Just like your auto loans, home loans, or any other durable property loan, travel loans serve the same purpose of setting a goal. It also helps clients maintain financial discipline and better manage their funds.
Meanwhile, due to the identified use, banks and new-age lenders are able to take better risk on customers and thus are able to offer cheaper products to travelers for them to realize. their wish. In fact, the digital lending space allows easier access to travel loans even for those without a credit history. With travel as a goal, the customer can purchase their primary financed product at an extremely low or ZERO interest rate. Typically, travel loans are available between 0% and 1% per month with a choice of repayment ranging from 3 months to 24 years, thus becoming the best cash flow tool. In addition, since the travel loan is independent of any pre-approval and use, banks and NBFC are able to offer a travel loan almost equivalent to the requirement (as they are offered at the point of ‘purchase). Just physically choose the travel package through a travel website or travel agency, choose the payment option, apply for the loan request, receive instant approval, get the booking confirmation, and to leave for the trip. The finance service is available from the tour operator, eliminating the need for a third party. New age digital loan companies are making it even more convenient by allowing customers to complete digital paperwork all at once, so the focus remains only on creating travel experiences and memories.
Holidays are expensive purchases and with daily expenses increasing dramatically, using credit cards with huge interest rates for the purpose of travel will only lead to financial stress later on. While every destination might not seem affordable, the high expense shouldn’t be a barrier to their experience or to completing last-minute vacation plans. After all, that’s what travel loans are for.