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Should You Take Out a Personal Loan to Fund Your Honeymoon?

Should You Take Out a Personal Loan to Fund Your Honeymoon?
The sangeet, haldi, pheras, and other exhausting rituals of your wedding are finally over, and it is time to spend quality time with your better half, away from everyone else, on your honeymoon. Just like your wedding, the honeymoon is also a once-in-a-lifetime moment. It is the ideal time to learn more about your better half and strengthen your relationship.
 
However, since you must have spent extravagantly to make your wedding a lavish occasion, your budget might become an impediment to fulfilling your honeymoon bucket list. If that is the case, then no need to worry. You can easily finance your honeymoon with a personal loan.

Advantages of Taking a Personal Loan for Honeymoon

If you are unsure about why you should take out a personal loan to finance your honeymoon, the following reasons should clear your doubts.

1. Quick Approval

Whether your trip is planned ahead of time or decided at the last minute, arranging funds is simple with a personal loan. These days, most financial institutions offer quick and easy access to funds. You only need to meet their minimum qualification requirements and make sure all required documents are in order. As soon as you submit your application, the advanced technology used by lenders to evaluate various risk parameters determines how much loan amount you qualify for.

2. Improves Your Credit Score

What if we told you that, in addition to allowing you to enjoy your honeymoon, a personal loan can also help you improve your credit score? Yes, you read that right. If you want to start building a strong credit profile, this loan product is the best place to start. It is recommended that you first determine your affordability with a personal loan EMI calculator and then choose the amount that best fits your budget. However, also ensure that you have a proper repayment plan. Once you close your loan account without any EMI skips, you will notice a major improvement in your credit score. 

3. Collateral Free

Travelling to your dream destination with your life partner by pledging or selling your valuable assets is not a wise decision. But if you choose a personal loan for travel, you can obtain funding of up to Rs 5 lakhs without pledging any assets. Another best feature of this loan is that you get an affordable personal loan interest rate provided that you have a stable income, a reasonable period of employment, and a low debt-to-income ratio.

4. Minimum Income

Why should you forego your dream vacation because of a low income? Many people abandon their plans for a honeymoon because they believe they will not be approved for financing options. This is not the case with a honeymoon loan. Even if your monthly income is as low as Rs 15,000, you won't have trouble obtaining funds. 

5. Multi-Purpose Loan

When on a honeymoon, your itinerary includes more than just sightseeing and trying new foods. It also includes going for shopping, trying out new activities, and getting a spa treatment. You will not be able to fully enjoy your trip if your lender does not allow you to use the funds for whatever purpose you desire. A personal loan for travel is a multi-purpose loan that can help meet all of the financial needs that may arise during your honeymoon trip.
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When Should You Avoid Taking Out a Personal Loan for Your Honeymoon?

Personal loans are an excellent way to fund your honeymoon. However, there are various situations in which applying for this loan product is not a good idea. These include the following:

  • If you have a bad credit history, never plan your trip by depending on this loan product. Since this financing option is unsecured, your application will be denied.
  • In case you have multiple debts or household responsibilities, getting a personal loan for leisure expenses is not a good idea. This loan has a higher interest rate than a secured loan, and failure to manage your EMIs will result in a debt trap situation for you.
Also Read: What are the Consequences of Defaulting on a Personal Loan?

Things to Consider Before Availing of a Personal Loan for a Honeymoon

Before you submit your loan application, you should do the following to make the most of your loan without getting into a debt trap. 

1. Choose Your Destination Wisely

Different locations are recommended for visiting during the different months in a year. For example, if you are planning a trip to Europe, it is best to go between November and March because there is less tourist traffic and bookings are cheaper. Similarly, when going to Thailand, travelling between June to September is recommended.

2. Plan in Advance

Rates are usually higher when hotels and flights are fully booked during the wedding season. You will also have difficulty finding accommodations in a new location. If you don't want to be in this situation with your significant other, plan your trip at least six months ahead of time. Off-season bookings are not only less expensive, but you will also have a wider range of options to choose from.

3. Shop for Deals

In the age of digitisation, you should never pass up the opportunity to compare offers from various travel booking portals. Most travel agencies and portals these days provide personalised offers for honeymoons. Their package price includes the cost for accommodation, flight tickets, food, and sightseeing. Choosing a package will save you money when compared to booking everything separately.

4. Purchase Travel Insurance

Having comprehensive travel insurance might lower the funding requirements through a personal loan. Travel insurance comes in handy during any unexpected situations that may arise during a trip. For example, it pays for additional accommodations if your flight is delayed, or another unavoidable circumstance arises. If you or your partner becomes ill while on vacation, the insurance will cover the costs of medical treatment. Simply put, the insurance reduces your dependability on the loan.

Also Read: 6 Foolproof Tips That Can Improve Your Personal Loan Application

Conclusion

Travelling for a honeymoon is regarded as a leisure expense. If you are financing your honeymoon with a loan without having a repayment plan, there is a high possibility of you defaulting on the principal outstanding in the future. Hence, it is advisable to plan a budgeted wedding by making advance reservations, choosing your honeymoon destination wisely, and buying travel insurance before heading out. It will lower your funding requirements, and the lower loan amount might also help you secure the funds at a cheaper interest rate. 


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Did You Know

Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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