A Financial Guide To Funding Your Dream Vacation

Jan 11, 2021

A Financial Guide To Funding Your Dream Vacation

Can you remember the number of times you gaped at a stunning picture of a couple in front of the Eiffel tower and wished it was you? The number of times you saved some travel influencer’s post on Instagram hoping that you would visit the same place someday? Or just wanted to watch the Northern lights from the little glass igloos in Norway? You probably do it often, hoping to go on that dream vacation of yours soon and strike things off of your bucket list. The bitter truth about these big dreams is the fact that none of it is free. Travelling abroad is a huge one-time expense that requires a lot of saving up or taking a travel loan. In this blog we will break down the process of planning, budgeting a vacation and funding it

Planning your vacation

First things first, fix the destination. If you are a beach person or a mountain person by nature, look up the places that suit your interests like Bali, Maldives, Himachal or Nepal. But if you have always wanted to travel outside Asia - to spend a fortnight in the United States or backpack across Europe or visit Australia just for the food then you might have to shell out some extra cash or take a travel loan. However, there are a lot of cheap foreign trips offered by several reliable travel agencies. Spend enough time doing research and fixing the destination you want to visit.

Budgeting a vacation

Budgeting a vacation and deciding the destination almost go hand in hand as you have to take into account the affordability of the trip while choosing the place. Once you have picked your dream destination you need to put down your expenses. From air tickets, the place of stay to food, shopping and travelling expenses, get to an approximate figure based on your income and ability to save money for travel. Budgeting a vacation is an integral part of a coherently planned trip and this should be done at least a year in advance if you are not planning to take a travel loan.

Saving money for travel

Even a week-long trip to Bali would approximately cost 2 to 3 lakhs for a family of 3. Strategising ways to fund this trip is the most part important of planning and budgeting a vacation. Once you have put down the maximum budget amount there are two options to fund the trip:

  • Saving money for travel
  • Taking a personal loan for travel

Saving money for travel means taking out at least 10,000 or 20,000 rupees from your monthly salary and putting it away in a savings account or a fixed deposit where you would not spend it easily. If there is more than one person who is working in a household, both members can contribute to the savings and end up saving money for travel faster. But this also means a lot of pre-planning and cutting down on extra personal/household expenses every month. Despite saving up for an entire year you might be short of a few thousand rupees to meet your dream vacation expenses. In addition, many perceive this method of spending a huge chunk of savings on a single plan, as a poor financial decision.  

Taking a travel loan

A more common and easier option to finance your dream getaway is to take a personal loan for travel or simply put, a travel loan. Many banks and NBFCs offer instant personal loan for employed individuals based on their credit score, salary and repayment ability. A personal loan is an unsecured loan which means that no asset is required to be pledged against the loan amount borrowed. The income earned by the individual is considered a surety while granting personal loans. A personal loan for travel is a popular and preferred mode of financing family vacations for the following reasons.

  • Most institutions offer easy online loan application process
  • No need to pledge any asset to avail the loan
  • Any amount can be availed as long as you are eligible and are creditworthy
  • The loan tenure is flexible and you can choose from 12 - 48 months to repay the loan

There are many people who take a personal loan for home renovation, wedding expenses, to pay medical bills, school fees, etc., but using it fund your short, dream holiday is the most popular choice of people owing to its ease.

A gold loan to fund your vacation

Though a personal loan for travel sounds fairly simple and easy to avail, the interest on these loans are heavy when compared to secured loans. Once you return from a relaxing vacation and stare at a year-long high-interest EMI, it might turn into a burden and defeat the purpose of a vacation. A suitable alternative to a personal loan would be take a gold loan to pay for your holiday. As a secured loan, gold loans are offered at a much lower interest along with the same benefits and in fact more benefits than a personal loan. Rupeek, one of the best gold loan companies in India provides a tension-free online gold loan process which is your best bet for stress-free travelling. There are several reasons why a gold loan at Rupeek beats a personal loan, but here are some listed:

  • Credit score is not scrutinised too much as gold is taken as surety
  • Interest rates start at just 0.79% as it is a secured loan
  • Minimal documentation. No income proof, tax proof required. Just basic KYC is sufficient
  • The loan amount is credited within 30 minutes of applying, right from the comfort of your own home

Funding your vacation could never get easier with Rupeek’s gold loans. Using the gold lying dormant in your locker you can pay for not just one but several cheap foreign trips with the gold loan renewal process. Or if you have already taken a personal loan you can easily transfer it to a gold loan with gold loan transfer. You just need to pack your bags and embark on an exciting holiday of your dreams with zero worries of financing the trip!

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