If you love to travel and have a destination in mind but not the cash, there are financial institutions that are willing to extend you the amount of money that can make a visit to your dream destinations possible. They will allow you to take a loan you are fronted some cash up-front and then you pay it at an agreed interest rate over a fixed period of time. Here is how you choose the best travel loans.
- See how much you need for the trip, including travel. You may do a budget and find that you do not need that much. It you dont, you may want to use your credit card for your travel expenses as it has lower interest rates.
- Look for travel loans, not personal loans. Many banks now call them by that name, and many come with perks like free car insurance. If you take out a personal loan, you may not enjoy these. Also, because its a new product, it tends to have lower interest rates than regular loans.
- Look at the interest rate. It doesnt matter what they are offering with the loan the rate needs to be reasonable so that you can make your monthly payments comfortably. The rate should not vary too much from the prevailing market rates. Calculate in advance how much you will be paying every month.
- Dont borrow a lot of money. The whole point of going on vacation will be defeated. You will come back to debt and all the rest and relaxation will disappear. Borrow an amount that you can use to spoil yourself moderately.
- If you can avoid, dont use your travel loan for shopping souvenirs. You know how shopping goes it can get out of control before you know it. Make it a policy to buy these things in cash and then dont carry too much of it around. You will find that you have limited your spending.
- If there is an option allowing you to pay back your loan for longer, dont take it. It means that in the long term, you pay more. It may not look like it, but take out your calculator and see just how much of a difference it takes.
- As you’re thinking about a travel loan, you may have talked to your travel agency getting one from them. Its not a good idea they are exorbitant compared to what you would pay in a bank.
As soon as you come back from your holiday, start to pay off your loan and avoid long term debt.
About the Author:
This guest post was written by Bruce. Bruce has been working in finance for many years, and has written many articles about personal finance issues. He is also a content writer for personalloans.com.au.