Can’t Afford to Travel: Take a Travel Loan in 2021
Today’s world is ever changing. It is now easier than ever to travel around the world. But as tourist’s revel in the possibilities of a world with no borders, they often find one critical obstacle; Cost. Traveling is expensive. There’s just no easy way to say it. For a long time, traveling was solely for the well-endowed and the rich. But times have changed.
With advances in technology, aspiring tourists now have new options for generating money for travel. Such options have made traveling available to the masses. If you’ve always wanted to travel but feel overwhelmed by the cost, simply take a travel loan.
Most people are unfamiliar with travel loans. In fact, many tourists have never considered a travel loan as a method of financing their travel. Travel loans are typically personal loans that are unsecured. Unlike a car loan or mortgage loan, they are not backed by collateral.
You will typically have two options regarding travel loans;
Types of Travel Loans
A general Travel Loan
Like explained above, a travel loan is simply an unsecured personal loan. Travel loans typically have a fixed interest rate with payments made regularly. This is often a great option for tourists who are certain of their spending; they can take a loan knowing the amount that they have budgeted for in planning their trip.
Line of Credit
Opening a line of credit is an alternative form of travel loan. The benefit of a line of credit is the variable interest rates which they typically offer. They also allow you to pay interest only on the amounts drawn against your credit line.
They are also unsecured loans with no collateral needed. Ideally, a credit line has a ‘draw period’ and during this time you can draw until you reach your predefined limit. There is also no minimum that you must spend to fulfill.
Lines of credit are great for tourists who are uncertain of how much they are likely to spend during their travels. You can choose to pay your travel expenses as you incur them instead of borrowing at first and paying extra financing fees. Lines of credit also help you to save money and keep track of your spending.
What are the Benefits of Travel Loans?
- Travel Loans and lines of credit are generally less risky than credit cards and other forms of unsecured borrowing.
- They are also better than carrying around huge wads of cash in foreign countries. Protect yourself and your loved ones by keeping your cash digitally. In unfamiliar places, it is common for tourists to lose money from theft.
Travel loans also keep you accountable to your initial agreement. Before taking the loan, you typically budget for your expected expenses. This keeps you from overspending or buying impulsively. What to be wary of?
- Keep in mind that you will eventually have to pay back your Travel Loan. Guard yourself against unnecessary purchases or unbudgeted activities to ensure you are in the parameters of your budget.
Do your research. Make sure you find a loan that suits your financial preferences. Also, read the loan agreement to stay completely informed about extra charges. It’ll probably be very boring, but it’s worth it. You’ll hate to pay for your ignorance when it’s time to repay the loan Here are some other methods of debt-financing for your travels.
Zero-interest credit cards
Some credit cards offer a zero-percent introductory rate on purchases for certain period. Some of these cards offer interest free-loans for as long as 21 months. There are two disadvantages of this type of financing, however; You must diligently watch your credit utilization ratio which pertains to your credit score. Your balance must be 30 % or less of your credit card limit on your cards. Otherwise, you may damage your credit score. Make sure that you have no balance left over by the time the introductory period finishes. Failure to do so will subject you to high-interest rates which you had not anticipated.
Just take a Secured Loan
To avoid the most hassle and get the cheapest interest rates, you may consider a secured bank loan. You must offer your home, car or other assets as collateral, but it may be worth it if you are certain of your ability to repay the loan. Home Equity product loans often have inviting interest rates even though they do take quite an effort to set up.
If you plan to take a loan to finance your vacation, you may want to consider some innovative ways of generating income whilst you travel. Here are some options;
Many tourists apply for freelance jobs that allow them to travel whilst they work. These jobs are usually remote and can be done from anywhere. For tourists coming from countries like the United States and other European countries, the strength of their currency may be able to afford them a sustainable lifestyle abroad. From there they can save money to repay their travel loan.
Rent out your home
You could also consider renting out your home (if you own it) to generate passive income whilst you’re away. This is a great option for people who plan to travel for extended periods of time. You can then use the rent money from your tenants to repay the loan.
Work on Holiday
Lastly, you may want to consider working whilst on holiday. I know that barely sounds enticing but it is a viable option. Some tourists have been able to get temporary jobs in their holiday destinations. This allows them to earn some income that will eventually go to repaying their loan. They also give them the experience of living and working in a foreign land.
How are you planning to travel?
Whether you’re a seasoned traveler or just an aspiring tourist looking for ways to afford your next trip, there are options available to you. Taking a travel loan can be a daunting and fearful task, but if done right can be a great way for you to find the money to finance your travel dreams. If you can’t afford to travel, consider a travel loan. comfortably
Written By Kate Mark
Kate is a mid-lifer who quit a growing corporate career to reawaken her passions and her lifelong dream of traveling the world.