Everything You Need To Know About Vacation Loans In India

Whether a family trip or a solo trip, a vacation is necessary for everyone. Visiting and exploring new places and having new experiences have benefits and advantages. But more important than going on vacation is having enough money to finance that vacation.

Funds are important to cover travel tickets, food, accommodations, and other miscellaneous expenses. It’s also important to keep a spare for emergencies and unforeseen events. Due to this, taking a vacation loan comes in handy.

While planning a vacation in India, securing a vacation loan is always better. It can help you finance your travel with ease. Furthermore, it is easily repayable in installments. But what exactly is a vacation loan? Is it just like a general personal loan? Let’s find out.

What is a vacation loan?

A vacation loan is identical to a personal loan for travel. However, it is specifically taken to pay for travel-related expenses. It includes hotel fees, meal bills, flight tickets, rental car fees, emergencies, etc.

A loan for travel can help you bear the cost of a getaway without causing major changes in your savings. It is one of the best ways to get a lump sum of money you can spend on anything related to a vacation.

Importance of a vacation loan

Taking a vacation loan is a smart decision while exploring new cities because:

• A vacation loan allows you and your friends or family to travel far and wide.
• A vacation loan has zero hassles, as you do not need to put up collateral or find someone who will act as your guarantor.
• A vacation loan has a relatively low interest rate, making it easy for you to have a fixed repayment plan.
• There are no restrictions on a vacation loan, as there won’t be any need for you to disclose details. You can even buy a gift for loved ones with the remnants of the vacation loans after paying for the necessities.
• Vacation loans usually come with very easy and flexible payment options. For example, you can structure the loan to be paid back within 1–5 years.

Guides for Securing a Vacation Loan in India

There are certain things to consider before applying for a vacation loan. You should be aware of the following factors before taking a vacation loan;

Decide your destination:

A successful vacation is determined by your destination choice. It depends on whether you and your family or friends like to spend time in the mountains or on the beach. It makes the planning process of applying for a vacation loan much easier.

Set a budget:

It will be smart to allocate a budget to your vacation loan before planning it. Start by allocating a budget for expenses. Take accommodation, food, sightseeing, and shopping expenses into account. Once you know all these costs, make a list. It can further help to know how much money you need from a vacation loan.

Check the existing fund balance:

Assess the funds you have in your savings. It can help you decide the amount you should get as a vacation loan. 

Fulfill the requirements:

There are eligibility criteria to be followed when processing a vacation loan in India. The following are the criteria:

• You have to be between the ages of 21 and 60.
• You may need to have stable employment for at least a year.
• You will need the following documents at hand during the application for the loan:
  • Photo identity proof
  • Current photograph
  • Proof of your address
  • Document of income, which includes Form 16 or a duly filled income tax return
  • Salary slips of at least a year from the date of application
• Your credit score is an indicator of your creditworthiness. The higher your credit score, the better your chances of getting a low-interest vacation loan.
• Make sure you only have a few personal loans running at the same time.

Steps for Applying for a Vacation Loan in India

Here are the simple steps you should follow to apply for a vacation loan in India:

• First, check your budget and finalise how much money you need.
• Then, go to any reputed credit score checker and check your credit score.
• Finalize where you want to go and create a plan for the vacation.
• Go around and look for multiple vacation loan offers from banks.
• Pick the best offer and apply for the loan.
• Provide the necessary documentation.
• Accept the vacation loan and finance your trip.

Guidelines Issued by the RBI Related to Vacation Loans:

The Reserve Bank of India has issued guidelines to both borrowers and lenders. It ensures that the vacation loan process is beneficial and fair to both parties. Given below are salient points to follow when securing a vacation loan:

• All applications for a vacation loan must be complete and include all the necessary information. It should contain the necessary details about fees and payments. So that borrowers can compare rates and make an informed decision.
• Verifying the vacation loan application must be done within a reasonable time. If additional information is required, they must immediately contact borrowers without delay.
• In case vacation loans for amounts less than Rs. 2 lakhs are rejected, they must convey the reasons for the same in writing.
• They must ensure the timely disbursement of vacation loans. If there are any changes in terms or conditions, they must communicate this to the borrower.
• If there is a need to recall, cancel, or request faster repayments, they should provide adequate notice to the borrower.
• Borrowers should not be discriminated against based on religion, caste, or sex.

Conclusion 

Getting a loan to enjoy your vacation has always been a lot of work. A vacation loan in India is the most optimal means to enjoy a holiday without worrying about funds.

Gone are the days when you would have to spend months saving money for your dream vacation. A vacation loan from Piramal Finance can help you visit your dream destination. The company allows you to plan your dream holiday with multiple benefits. They offer services like flexible loan repayment tenures and minimal interest rates. For more information, you can visit their website now.