Travel Credit Card or Personal Loan – What Should You Choose for Your Trip?

The flexibility to use your personal loan as you would like has opened the doors to endless opportunities. For instance, you can use the loan amount for the daily operational costs of your business, fund your own wedding and travelling adventures.

Table of Content

• Availing Personal Loans to Fund Travelling
• Using Credit Cards to Fund Travelling
• Who Should Choose a Personal Loan for Travel
• Benefits of Choosing a Personal Loan for Travelling
• Who Should Choose a Credit Card for Travelling
• Benefits of Choosing Credit Cards for Travelling
• A Few Tips on How to Manage Travel Expenses
• Conclusion

Personal loans have been a preferred choice for a while. However, the intervention of a travel credit card has stirred curiosity in all people. Before even choosing one, it is essential to look at the financial institution and its loan offerings from an NBFC (Non-Banking Finance Company) brand. Doing this is important so that your next adventure does not come with the cost of a heavy financial burden. Let’s find out what is ideal for travel adventures, a personal loan or a travel credit card.

Availing Personal Loans to Fund Travelling

The flexibility in the application of personal loans has made them synonymous with travel loans. The approval of personal loans and the amount you require are dependent on your credit score. Availing of a personal loan for travel expenses is not limited to that. A major advantage of a personal loan is that they are hassle-free and quicker disbursal. However, personal loans for travel come with their own demerits, such as the high interest rates. The best way to address personal loans to your advantage for travelling needs is to divide the travel cost over the entire loan tenure period. Doing this will ensure that you don’t make a hole in your pocket.

Suggested Read: How to Get a Pre-Approved Personal Loan? Step-by-Step Guide

Using Credit Cards to Fund Travelling

Credit cards have a predetermined limit that you can spend for travelling. Availing funds through personal loans and credit cards requires you to have a good credit score. However, if you have a credit score, it is easy to create a good credit history and making payments on time will eventually increase your credit score. It is better to use a credit card if the expenses beyond transportation and lodging are not going to be a problem. Additionally, using a credit card for booking flights and hotels helps you to avail discounts and cashback. More importantly, it also offers instant access to funds, which can be used during emergencies.

Who Should Choose a Personal Loan for Travel

• Those who require a large sum of money to extend their holidays for comprehensive travel plans.
• Those who need a longer repayment tenure to manage their budget efficiently.
• Those who want to compile all their travel expenses and need them in one manageable loan account.

Benefits of Choosing a Personal Loan for Travelling

• Free of Collateral – For availing personal loans, a borrower does not have to keep any form of security.
• Ease of Convenience – Availing personal loans is as easy as said, done. One can apply for personal loans from the comfort of one’s home.
• No Processing Fees – Most lenders do not charge processing fees on personal loans.
• Quick Disbursal – Once the application is approved, the loan amount will be credited in a matter of minutes or an hour to the extent.

Suggested Read: Top 5 Different types of Short Term Loans in India

Who Should Choose a Credit Card for Travelling

• Those who prefer the flexibility of paying as they embark on a short getaway or trip.
• Those who want to enjoy the rewards and other perks associated with card usage.
• Those who need emergency funds without going through the hassle of documentation.

Benefits of Choosing Credit Cards for Travelling

• Flexibility & Added Convenience – One can apply for a credit card online by following a few steps. It also eliminates the need to carry hard cash or worry about currency exchange.
• Offers and Rewards – Using your credit card for making travel-related payments offers the benefit of savings with perks such as airline miles, hotel discounts, cashback, etc.
• Interest-Free Period – There are many credit card providers who offers interest-free repayment in case the borrower repays it within the tenure or billing cycle.

A Few Tips on How to Manage Travel Expenses

• First, prevent overspending, set a strict budget and adhere to it.
• Choosing the most cost-effective option involves comparing the interest rate of a personal loan with that of a credit card.
• Always make sure that you keep some savings aside for emergency purposes.
• Ensure to stick to your planned budget by tracking your daily & other travel expenses.

Conclusion

Personal loans from Muthoot Finance offer an easy way to fund long-term goals and short-term ones, such as travelling. Though personal loans are widely opted for fund travelling rather than a credit card. The ideal option to fund travelling expenses depends on your financial status, financial goals, spending habits and the duration of your holidays. For some, choosing a personal loan or a credit card to fund travelling is a personal choice. However, if you are looking for a cost-effective option and want to save money, then considering factors like interest rates, repayment terms, etc. will help you navigate in choosing the right option.