After planning your itinerary for your next adventure, you now have to deal with the scary part of travel planning: budgeting! Just looking at the building amount of expenses for the trips sends shiver down your funds.
But should those numbers stop you from exploring the world? Definitely not! For every problem, there's a solution, so if you're running short on travel funds, you can always find other means. Like taking a loan.
But is it worth getting into debt while you're enjoying the wonders of the world? That's what we're going to find out. Read on to discover if it's worth taking a loan to finance your travel, and how to avoid the guilt of debt and enjoy a worry-free adventure!
Should I get a travel loan?
That depends. If you have the capability to repay your loan according to your agreed terms without any hassle, then go ahead and take a loan.
But if you perceive your earnings or savings not enough to cover the repayment, you may want to consider alternative fundings instead.
While loans are convenient for supporting your travel goals financially, it's still a risky decision. Careful research and planning will see you enjoying the most out of your borrowed travel money, so consider first your situation and needs before borrowing money.
Which is better, credit cards or loans?
Again, it depends. If you're debating whether to stick with credit cards or loans, review these situations and see which of these you fit the most.
Some travelers use credit cards because of the insurance, purchase protection, and air rebates it offers. You can also earn points you can use to redeem rewards, like shopping discounts.
You also don't need to carry cash with you all the time, which adds more security and convenience for travelers, especially when visiting crowded places or trying out activities that require you to leave your belongings behind.
However, those who use credit cards tend to overspend more than what they budgeted for because of the ease of payment. When they get home, they end up baffled with the high-interest rate they need to pay.
Then there's the limit too. Once you reach your credit limit, and you still have other expenses to cover during the trip, you'll have to stick with your extra money or withdraw your extra savings.
On the other hand, people choose to take loans so they can get the money up-front.
The lower interest rate is also one of the major benefits of getting a loan. It's a little price to pay in exchange for having money to finally push their travel plans.
The interest is also fixed, and you're not limited to how much you can borrow with loans.
Loaning is not as tedious as others might think. Lenders like Cash Mart make the application process easier, and the approval process is now faster and easier, so you can get your money in just a few days.
On the downside, the interest rates for loans start the day you take the loan. You need to consider this additional interest charge when planning your repayment options.
TL; DR: If you want to enjoy more travel perks, extra protection, and earn reward points, and you don't mind the higher interest rate, go for credit cards.
If you want to save more from interests, be able to borrow the amount you need, and prefer to have on-hand money, travel loans are your best bet.
How do I keep myself from falling into a bad debt from my travel loan?
It's easy to feel guilty of being in debt just to enjoy the trip you've been planning for months, but here's how you can avoid falling to the depths of debt despair.
1. Borrow what you can only repay. Don't be tempted to borrow the whole amount of your expenses, or you'll really end up in unwanted debt.
2. Use your savings first to cover your expenses. Only take a loan when your savings can't cover everything. This way, you won't need to loan a huge amount and curse the interest rate when the repayment period starts.
3. Review your loan options first. Compare interests and other included fees for travel loans offered by different banks and lenders of your choice.
4. Let your family know you're taking a loan. Should you run into a problem with repayment, you can always ask them for help.
No comments