We pour a lot of money over Travelling. These costs are explicitly high at times depending on the market. This can get on your nerves and put a dent on your savings. On the other hand, a millennial might not have too much optional savings to spend in one go. As a result, you will find a lot of them opting for a personal loan to finance their travel.
The minimum salary required to avail a travel loan
Almost all people earning a monthly salary or pay would want to go on a holiday or vacation. However, not many of them save enough money for their travel and other expenses, and therefore, try to get a travel loan. Borrow your travel loans from Buddy Loan explore the benefits of lowers interest rates, increasing your CIBIL score and loan repayment options from this loan aggregators.
A travel loan is a kind of personal loan that is attained for the purpose of traveling.
Applying for a travel loan is not very simple, however, a few essential requisites need to be satisfied before you apply for the loan. Some of the common criteria that are necessary as according to all lenders before they grant you a travel loan are as follows:
- AGE: Some of the financial institutions set the minimum age criteria to be 21 years, while some of them set it to be 23 years, and below 55 years.
- INCOME STABILITY: Most lending institutions ensure to verify that the potential borrower has been in the job with the company for a term of at least 6 months.
- GOOD CREDIT SCORE: You must have a good credit score before you apply for a travel loan. You can secure unsecured travel loans that are loans that do not require collateral, only if you have a good credit score.
- MINIMUM INCOME: Apart from all of the above mentioned, this criterion is one of the most important. Two kinds of people are eligible for a travel loan. They are
- FULL-TIME PROFESSIONALS: Full-time professionals who are paid a take-home salary of minimum Rs. 20,000 per month are qualified to attain a travel loan. However, they should have been in that job for a minimum period of 6 months before they apply for such a loan.
- SELF-EMPLOYED PROFESSIONALS: Self-employed like doctors, lawyers or business owners can also attain a travel loan if their monthly income is at least Rs. 20,000 per month.
Things to consider before you apply for a travel loan
Following are a few points that you must keep in mind before you apply for travel loan from any lending institution.
1) Estimate your budget for the travel and always set a loan amount that is considerably higher than your actual budget.
2) Consider the rates of interest of each financial institution, and apply to a financial institution that does not have a very high rate of interest
3) Analyze whether the EMI would fit the budget of your monthly income and expenditures. Also, consider a loan which has short-term so that you do not end-up paying interests for a longer period of time.
4) Evaluate other possibilities or alternatives to spend on your holiday instead of taking a loan, as a loan would always cost you interest amounts.
Travel Loan without a PAN card!
Most banks require mandatory documents to disburse this loan. A PAN card is one among them. In fact, it is the most important document that could be required by banks and financial institutions. Therefore, getting a travel loan from a reputed or established bank without a PAN card may be difficult. However, there could be provisions where the loan can be given without a PAN card:
- Upon submission of an AADHAR card
- Bank statements
- Letter of consent from the credit manager
- Good credit history
- The personal loan amount is below Rs.50,000
Losing a PAN card can affect your travel loan, …
PAN card number would be sufficient for obtaining the travel loan. A submitted application for re-issue of duplicate PAN card may be required by the credit department of the bank.
Can I get a travel loan without paycheck receipts, IT returns:
- If IT returns are not available, Form 16 can be submitted.
- Although salary certificates are mandatory, alternative avenues of income can be projected to get the loan. It could be in the form of residential property rental income, business income, income from another employed/self-employed member in the family etc.
- Travel loans don’t need collateral, but they may be required to be furnished if the borrower is unable to furnish salary certificates, alternative avenues of income etc.
- There could be pre-approved personal loans based on the relationship status of the borrower with the bank. If the borrower has maintained their repayment record consistently, they will be eligible for these pre-approved personal loans with relaxed document submission rules.
- In situations where no immediate family members or relatives are available to be projected as alternative sources of income, then a co-guarantor or co-signee may be required by the bank.
Applying for a PAN card, …
A PAN card is of critical importance and is required almost in all scenarios by lending institutions. Applying for a PAN card is an easy process.
- Submit an online application. Documents required are scanned passport, driving license, AADHAR card etc.
- Or submit an application with the local bank where the account of the applicant is located.
- Or submit an application via the local authorized government agency.
- Cost of PAN card is nominal for people with communication addresses based in India.
Any tax exemptions on a travel loan
There is no specific deduction for a travel loan. A travel loan is just a personal loan where there is no tax exemption here. Other personal loan involving education, home, etc., can be having tax exemption whereas travel loan is a particularly personal loan. It won’t escape the tax bracket.
- For self-employed people, a personal loan is classified as an expense that can be covered under tax exemption from the business profit.
- Tax can be calculated on the profit by applying the exemption received on the personal loan.
- Applicable for let out properties.
- If rental income is received, tax exemption can be claimed if a personal loan has been taken for construction of the home.
- Up to Rs.2 lakhs can be claimed.
Purchase of assets
- Applicable for personal loans taken for the purchase of commercial property, shares, precious stones/wares etc.
- Personal loan interest is not covered in the year the personal loan was taken or subsequent years.
- Paid personal loan interest is added to the cost of acquiring the asset.
- When an asset is sold, capital gains are reduced by the cost of acquisition, and this also reduces capital gains tax.
A personal loan or a travel loan:
A travel loan is nothing but a personal loan with the purpose of being used for travel. It is unethical to use a personal loan for travel and claiming tax exemption on the personal loan. A better option would be to consider leave travel allowance.
Leave travel allowance:
A corpus of money of an employee’s annual cost to the company is allowed to be exempt from tax for the purpose of leave travel upon submission of leave travel receipts.
- Leave travel allowance (LTA) is only for those who have been employed by companies/organization/corporates.
- LTA can be claimed for self and depending on the company policy for family members as well.
- LTA can be claimed once in four years for all the four years or every year.
- Air travel, train, car, bus and all modes of transport are covered. Food and accommodation expenses are not covered.
- It is ethical to provide travel expense receipts only for travel expenses from the source to the destination that was the shortest route.
Advantages of a travel loan
This fact can never be denied that travelling has been the most favourite thought, especially for youngsters among all. Half of our generation is young, and they have this passion for travelling but sometimes the only hurdle that lies between this passion is financial issues or expenses. Every problem has a solution and so does this.
Quick & easy documentation:
Travels loans are pretty unsecured. One need not provide a guarantee or pledge their assets in exchange for the money. Thus, there is no big deal if you are not able to provide any guarantor or collateral.
Simple documentation is required which carries easy processes done by the banks.
It is totally hassle-free. There is no specific need to visit banks or NBFCs. You can easily apply for a loan anywhere, anytime.
The repayment times
People are often much worried about loan tenures. Some of them are unaware and think that it is not an easy thing to pay back loans. But in practice, different agencies provide you relaxation to re-pay loan according to your desired period. They usually offer an extension for about 5 years to repay the loan, and you can choose the period.
Travel loan for students
Student travel loans are also provided with numerous benefits to those who want to travel to their favourite destinations. If a student wants to travel but has fewer funds, student loan comes with advantages like hassle-free process, minimal documentation, quick disbursal which will help you to plan your desired trip with a lot of ease. Hence, it is very popular among students.
Often such situations like the wedding of someone very dear to you or bachelor party happening overseas which you can’t resist and are very eager to attend but going through short of savings these situations become complex, and you are bound to cancel. At this time, you can apply for a travel loan and can get funds easily for your needs. But before going for a travel loan if you can make a budget this would be better for you.
The loan amount can be smoothly used for booking air tickets, hotel bills or another expense regarding your travel. Medical expenses are also included as health is the very first priority. These facilities can make your trip totally unforgettable. There is no limit for the use of a travel loan, whether it is a foreign trip or a domestic one you can use it to travel on any destination of your choice.
The most convenient part is, due to less documentation you can plan your travel on a very short note. Emergency travel can also happen because of simple procedures.
There are fix EMIs to repay your loan amount monthly. Not only EMI, but there are also Multiple Repay Options which makes your life easier. As soon as your application is approved, the loan amount is transferred in your bank account within 48 hours.