As the mercury rises and you look forward to spending some time in a cooler location, you realise that your planned summer holiday is still some time away. With schools out, and the kids lounging around the house, this is the perfect opportunity for a little family bonding by extending a weekend into a long weekend vacation. Plan an ‘unplanned’ holiday at one of the hill stations close by to get over the insurmountable heat in the city. While this sounds great, there is a looming question of raising the financial resources for an unplanned getaway.

A travel loan with a line of credit would be a great way to finance your last-minute family vacation. A personal line of credit or PLOC is a loan that is extended by banks to cover a specific purpose. In the above case, you can apply for a personal loan for travel, which will cover one or more of your family vacations. A PLOC is a loan opportunity that can bring great value to a borrower. A line of credit differs for a regular loan in many ways. In a regular personal loan, a borrower would pay EMIs consisting of the loan amount and interest. In a personal line of credit, the entire loan amount is available to the borrower; however, the interest is charged only on that portion of the loan amount that is used by the borrower.

For example, Vishal, an IT professional from Bangalore, avails a personal line of credit of Rs.5,00,000 and uses just Rs.1,00,000 for a weekend getaway. In this case Vishal will be charged interest on only Rs.1,00,000.

Here are the benefits of a personal line of credit when it comes to covering your frequent travel expenses:

  1. The monthly repayment of a line of credit includes only the interest component of the loan amount. You can repay the entire loan amount at or by the end of the loan period.
  2. You have the option to repay the loan amount as per your convenience before the end of the loan period. There are no restrictions on repayment. Also, you can avail an amount from the line of credit, repay the principle and again use a portion of the loan amount as per your needs without having to intimate the lender.
  3. There are no restrictions on the amount of credit that the borrower can withdraw at any time. The loan amount is held in an account with the lender, which the borrower can access. You have the right to transfer the loan amount into any account you see fit.
  4. The interest is charged only on the amount from the line of credit that is used by the borrower. You are not charged interest for any part of the sanctioned line of credit that is unutilized by you. As long as the amount is kept with the lender there is no interest payment required.
  5. The borrower has the opportunity to repay the amount withdrawn from the lender or transfer a fresh amount from the lender at any time online without any prior permissions or information to the lender.
  6. There are no limits on the number of prepayments or withdrawals from the line of credit account. Also, there are no fees or charges that are levied.
  7. In most cases the borrower has the option of converting the amount withdrawn from the line of credit account into a term loan for ease of repayment.

When you are considering a personal line of credit to fund a vacation or a long weekend getaway, consider Bajaj Finserv as your lending partner. They make the process of availing the personal line of credit as easy as possible with limited documentation, provide an online application process and offer the borrower additional benefits such as flexible repayment and the option to convert the borrowed amount into a term loan.

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