Shalini has just completed her MBA and landed a great job. As a treat for all her hard work, she wants to head to Europe on vacation. The only concern here is the huge cost involved. Shalini has some money saved up, but it might not be enough for the two-week trip she has in mind. So, Shalini approaches her bank for a travel loan.

A loan for travel

A vacation loan is a great way to fund your Euro trip. In fact, more and more people are warming up to the benefits of vacation loans. Round trip flight tickets from Mumbai to Zurich, for example, cost upwards of Rs. 40,000. You also need to book the hotel in advance. That does not come cheap either.

All of this could empty your bank balance. What is the point of getting there with no money left to spend? You will need extra cash for food and shopping too. And while exploring European cities on foot is wonderful, you may need to take a bus or a train at times.

So, the first step is to figure out how much it will all cost. If your travel budget is small, you need to find good deals on just about everything. Here are some ways to do this:

  • Look online: For starters, you should surf the internet for the lowest airfare ticket prices.
  • Move like a local: Save on transportation costs by using public transport.
  • Go small: European budget hotels and hostels offer all the basic amenities at reasonable rates. Who needs hotel brands?
  • Get off-season bargains: Peak tourist season in Europe is expensive. Plan your trip during the off-season, from October to April.

Once you know how much everything will cost, check out your bank balance. Rather than cutting back on necessaries because of a tight budget, just take a loan for holidays.

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Get a travel loan before take-off

Shop for a travel loan before you finalise your tickets and accommodation. The process for getting a travel loan is easy. You can easily get a vacation loan online. Just fill up a form and submit the needed documents. For example, Bajaj Finserv lets you buy personal loans for travel online. Simply sit back at home and find the travel loan you need.

A big question is how much the travel loan will cover. Typically, these loans provide for around 80% of your total travel expenses. This should include your tickets, visas, and accommodation. Most lenders will charge a small processing fee, but the rate differs. ICICI Bank, Axis Bank, and Bajaj Finserv may all charge differently.

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Many banks even offer special travel loans for senior citizens who are under 70 years of age. So, this is a great way to fund part of a family trip to Europe.

Travel finance takes the form of a personal loan. Like in any other personal loan, there is no need to provide collateral. You can get loans of up to Rs. 25 lakh.

Once you have the loan in hand, set out on your big adventure. Make payments for your travel loan in instalments over the next one to five years. If you are unsure about the overall costs, use a personal loan EMI calculator. This will help you calculate how much to pay as EMI each month.

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