Many people don’t think twice before taking a personal loan to fund their leisure travel, so compelling is the idea of a vacation for them.
From a lender’s perspective, this rise in personal borrowings in a sluggish economy, what if only for a vacation, makes perfect business sense. But from a borrower’s perspective, it is far from it.
Given the cost one has to bear for it, the leisure turns into a ridiculous liability.
Vacation on Loan Personal loans, being collateral free, bear a higher rate of interest than other form of loans, typically 14% to 23% for a two-year or more tenure of two years or more.
So Rs. 4 lakh borrowed for a 10-day vacation could translate into an EMI of Rs. 13,500 per month for three years or more.
This self-scripted botheration impacts the borrower’s loan eligibility for other purposes. Worse, the holiday itself adds fuel to the fire as people tend to be careless about their travel expenses.
They hardly realize then that the huge credit card bills in conjunction with the personal loan EMIs would play havoc in the time to come.
And if the borrower fails to service the loan EMIs at any point, the credit score is badly hit.
Thus it’s always better to methodically plan and save for a holiday even if one may have to wait for a few years to realize the big dream.
The sheer financial comfort of a self-funded vacation makes it truly memorable in every respect.
Curated from Vacation on Loan? Vacate the idea