¿Cuando los préstamos para viajes tienen sentido?

Today, with the pandemic and the labor crisis that we are experiencing, we ask ourselves a thousand times: is it worth traveling? Is it really a good decision to spend the money I have on travel? will I need this money in the future?

I share my experience and my vision on this subject because I consider that the happiness of traveling is not compared to a good house, a successful bank account or a late-model car.

Nor do I think that traveling is impossible in these times of covid-19, like most of my family and friends; And if you have been planning a trip for a long time and you may have saved money for part or all of it, my advice is not to invest it in your trip and ask for a Travel Loan or Travel Loan.

It is always good to have money for unexpected expenses or emergencies that may arise. By using a travel loan, we can keep savings intact and pay travel costs in fixed monthly payments over time.

If something goes wrong in the future, we will have money saved to help pay for it, and we will win in two ways: by keeping savings intact and by strengthening credit history by paying off the loan. The next time we choose to borrow, we have more options in better conditions.

What is a travel loan?

A travel loan is usually a personal loan, a fixed-term loan, and without collateral. "Unsecured" means that we are not putting the home or other valuable property as collateral for the loan, and we are not in danger of losing that home or other property if for any reason we are left behind.

Lack of collateral can mean slightly higher interest rates, although exactly how high will depend on current market conditions and our personal credit score. “Fixed rate” means that whatever interest rate is agreed upon when the loan ends is the rate it will be for the life of the loan, regardless of what happens to interest rates nationwide. "Term" means the number of payments required to repay the loan, as well as the due date and the exact amount of each, is established at the beginning of the loan and will not change until the loan is paid in full, at least not without some type of refinancing approved by both us and the lender.

Some travel finance loans can be set up as "lines of credit," in which interest rates and a credit limit are set in advance, but the money is not distributed until we request it. The advantage of a line of credit is that you only take out what you need, when you need it, up to the maximum amount. Under this system, we only pay interest on the money we actually use; future needs can be managed, well… in the future.

Many lines of credit also allow us to "re-borrow" money that has been repaid. If we withdraw most of your maximum amount, for example, then over time we pay back about half, we would now have that percentage of the maximum amount available to borrow and use again. That means paying interest on the refund again, of course, making a line of credit similar in many ways to a credit card.

Any of the cases that we use to finance the trip: Line of Credit or Personal Loan, allow us to maintain savings, face an emergency situation at any time and demonstrate that travel loans have the meaning of happiness.

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