Millennials are increasingly aspiring to have a good lifestyle, and they want to enjoy their life to the fullest. One way which millennials try to have a good time is by going on a travel holiday along with their friends. But traveling for a vacation requires a lot of funds, and this is where Millennials face a problem. Most millennials in India have either started their careers and might not have enough savings for planning a travel vacation.
That’s where a personal loan can come to their rescue, and it has become increasingly popular among millennials for financing their lifestyle. The reason why it is popular is that it is an unsecured loan which does not require collaterals. Basis of providing personal loans depends on the criteria of income, credit score, repayment capacity, etc. But the interest rates are higher when compared to other loans because of the greater risk involved.
A personal loan can be used for travel purposes and it provides multiple benefits to millennials like
Helping in reducing the budget gap
No matter how much they save, Millennials do not have enough funds to finance their travel trips. Lack of money is one of the major reasons why millennials are not able to plan for their travel trips.
In such a case, taking a personal loan can solve the problem of a lack of funds by bridging the gap.
Flexible use of loan amount
Once the loan amount is given by the bank or Non-banking financial institution (NBFC), the millennials can use it as per their preferences. They can use it for their travel expenses but if there is a certain portion of the amount still remaining it be used for other personal purposes by the loan taker.
No need for collaterals
One of the main reasons why millennials prefer a travel loan is that it does not require collaterals. Unlike gold loan or land against loan which requires securities in the form of gold or land, a travel loan is given after taking into consideration the loan takers income, credit score and repayment capacity.
Speedy approval and dispersal
Being an unsecured loan, the time taken for approval and dispersal of the loan amount is considerably less due to minimum paperwork. If the loan applicant fulfills the criteria and has a good credit score, the process can become even faster.
Fixed interest rate
A personal loan is generally available on a fixed rate of interest. So the equated monthly installments [EMI] will remain fixed for the entire loan tenure. Hence millennials have no need to worry about the interest rate changes.