Best personal finance options to fund your next vacation

Best personal finance options to fund your next vacation

Best personal finance options to fund your next vacation

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Planning a vacation can be exciting, yet at the same time, it could be financially draining. The expenses around flights, hotels, shopping, etc. could burn a hole in your pocket, leading to travel plans either being canceled or postponed. However, there are certain financial alternatives available that can ease your travel expenses, helping you out when you fall short of funds to fulfill the dream vacation. These include short-term personal loans and travel credit cards.

Let’s talk about the pros and cons of these finance options in detail.

Avail a Short-term Personal Loan

Unlike secured loans that can generally be used for specific purposes, personal loans come with no such usage restrictions. That way, it can be a convenient option to fund your vacation, especially international vacations that are comparatively costly. Nowadays, these loans are very easy to apply for, as they can be availed digitally with minimal documentation, such as basic identity and address proof. The loan can be repaid in EMIs, as per your choice of tenure. To check the available options as per your eligibility, you can visit online marketplaces like Paisabazaar.com.


Note that the interest rate on personal loans is higher in comparison to most other loans. Currently, the minimum interest rate on these loans is 10.49% in India; however, this may vary as per your eligibility and lender’s terms and conditions. Some lenders, especially those with whom you own a bank account, may also offer you pre-approved instant personal loan at a discounted interest rate and processing fee.


Find the Right Travel Credit Card

Another popular financial alternative to fund your holidays is a travel credit card. These cards come with benefits like rewards on travel bookings, co-branded discounts and offers with travel portals, travel memberships, complimentary lounge access, low forex markup fee, etc. Such benefits can help you save on your travel expenses. However, you must ensure planning your travel as per a budget that matches the available credit limit on your card.

In comparison to instant personal loans that can be availed as a last resort, availing a travel requires time and effort. The applications are processed in 7–15 days. Besides, it is also important to do thorough research and find the right credit card from the available options.

Always look for features that fit your spending patterns and lifestyle preferences. Shortlist cards based on factors like your preferred mode of travel—railway or airline—your preferred location—domestic or international—or if you have any brand loyalties—with airlines, hotel chains, or travel portals. For instance, if you frequently travel abroad, it is better to find a card with a low forex markup fee, good frequency on international lounge access, and airport concierge services. Similarly, for brand preferences across travel merchants like MakeMyTrip, EaseMyTrip, Yatra.com, Vistara Airlines, Ixigo, InterMiles, Marriott Bonvoy, etc., you may find a card accordingly.

Maximize Existing Offers on your Cards

Lastly, make the best use of what you have at hand- your existing credit card. If you own it, you already have access to immediate funds. You can use your card to book travel tickets and hotels and repay the amount by the due date. To further ease your travel expenses, maximize savings via the existing offers and discounts on your card. Issuers offer discounts on flights and hotel bookings during the vacation seasons and long weekends.

You can also use the accumulated reward points on your credit cards, if any. Some card issuers allow redemption of points for hotel and flight bookings, travel vouchers, against air miles or hotel loyalty programs, at portals, like HDFC Bank SmartBuy, Axis Bank EDGE Rewards, etc.


On a concluding note, understand that even though personal finance options are a reliable and efficient source to fund your expenses, they need to be handled with utmost responsibility. Set budget limits for your trip that fit best with your income and lifestyle expenses. Understand that financing your vacation should not lead to overspending, as eventually these are ‘credit’ options that need to be paid back.

You must always ensure borrowing funds as per your repayment ability. Pay your EMIs and bills on time and in full to avoid late payment and interest charges. Avoid frequent overutilization or exhaustion of the credit limit for a discretionary expense like travel. After all, no experience is worth the cost of bearing a debt.