Going on holiday is surely something everyone looks forward to. However the amount of money involved is often considerably higher, and as a result there are many who end up giving up on their wish for fear that it is beyond their current savings or budget. On the other hand, others decide to take a personal loan so as to be able to finance their travelling and accommodation expenses, and make their holiday a reality. However, is this a good idea? Shouldn’t a person borrow money only as a last resort, and to be able to finance needs rather than wants? This is just what we shall discuss here.
As a general rule of thumb, the intent of a personal loan is to finance short term goals. So, strictly speaking, it could be anything that requires a relatively small amount of money. For this reason personal loans are perfect for travel. Some people might think of resorting to credit cards, but generally the interest rates on personal loans are lower than those of credit cards.
Having said that, it is important to make sure that if you decide to take a personal loan to finance a holiday, you do this with an open mind. Consider the fact that you need to repay this loan, and you have to be certain that you can do this along with the various other expenses you have to see to in day to day life. You do not want to end up stressing about repayments for a year or so, only to be able to enjoy a holiday for a week. In such a case the fun you had when you went on holiday would end up being ruined further on. So make sure you make the decision sensibly and make sure that you borrow responsibly.
It is also worth pointing out that the money you get from a personal loan should be used productively. Do not be tempted to spend it off without giving much heed to what you are buying. The money you get from the personal loan ought to be used for essential travel costs and not to spend it to buy souvenirs or items you don’t really need, or to dine in a restaurant that is really costly when you could have done away with it.
There are various options revolving around personal loans Philippines. You will be able to compare the terms and conditions, and the interest rates applicable from various lenders. Make sure to consider a feasible repayment amount and discuss the repayment schedule with the lender. Unlike credit cards, personal loans will not offer benefits such as warranties and purchase protection. Some credit cards also offer reward points and a number of travel benefits. however if you were to compare the interest rate on a personal loan for travel, with the interest rate of a credit card, there is often a substantial difference.
While you are searching for personal loans Philippines you will often find the personal loan calculator tools very handy. These will give you a good idea of the prospective repayment amount and time.
It is important to be down to earth when considering getting a personal loan for travel. While getting the money upfront is really tempting, bear in mind that you need to repay it in the future. So, only borrow if you need to borrow. Some people simply apply for personal loans Philippines as they are convenient and a quick way to get some extra cash to finance the various travel expenses. But in many cases they do not take the time to consider their current savings, and see if they can reasonably use them for the holiday. Many do not take the time to consider whether they could afford to cut back on certain expenses for some time, so as to be able to save up for their traveling expenses instead of taking a personal loan.
In reality you will be paying interest on the amount you borrow, and so most likely you would be better off withdrawing money from your bank account instead of immediately resorting to taking a personal loan.
It is also imperative that you opt for a personal loan that comes with repayments that you can handle realistically. Never go beyond your means. Consider your day to day living expenses vis-à-vis our salary, and factor in possible expenses such as medical expenses, fees you might have to pay for your children’s schooling, any expenses that could crop up if an appliance at home needs to be replaced, or if your car breaks down.
Missing a repayment just because it was a bad month and you could not handle it is not an excuse. Bear in mind that your credit score might be impacted as a result, and should you need to take a loan for more important needs later on, you might face problems to do so.
Once you have made a thorough evaluation of your financial position and how much money you will be needing for your holiday, you can then decide if it is a good idea to take a personal loan for travel. If the answer is yes, you will then need to make an informed choice. Look for personal loans Philippines and compare and contrast them to one another so as to find the best personal loan for you.
Many people simply go for the loan that comes with the lowest interest rate. While you want to keep the interest rate as low as possible, you should however also take into account any fees and charges, such as processing, documentation and pre-closure fees. If you have a tight deadline, you will also need to consider how long it will take to get the loan approved.
It is also very important that you take the time to read, and to understand, the fine print. Unfortunately many people simply neglect this with the common excuse that they do not understand it. However, never sign any document if you have not read and understood everything. You want to know what you are agreeing on.
As a general rule of thumb, personal loans can come in really handy, but do take the time to make a responsible decision before resorting to one of them to finance a holiday.