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Planned travel in the last minute? Here are your alternatives to Credit Card

Adhil Shetty

While planning well in advance gives you a financial edge over impulsive travelling, spontaneity has its own charm. Sometimes people even end up making last-minute plans due to family emergencies or work.

Whatever be the reason, last-minute travel plans are not a cakewalk, especially when you have to fund it on your own. From flight tickets to hotels, everything could cost you more. And, people often reach out to use Credit Cards to find a way out of a sticky situation.

There are various ways to fund your impromptu travel without excessive usage of Credit Cards. Let’s look at some such options.

Vacation Loan

A vacation loan comes cheaper than Credit Card with an average interest rate of 11.3% per annum.  Although it is a type of personal loan, it comes at a lower rate of interest. Application for a vacation loan is hassle-free and can be done online.

Personal Loan

A Personal Loan can fund your holidaying – air tickets, hotel stay, exotic cruises, spa treatments, and more – at an interest rate of 24%. Although the interest rate is on the higher side, it is less than that on a Credit Card. Many banks and NBFCs in India offer Personal Loans, with some even offering pre-approved Personal Loans based on the borrower’s credentials, credit standing, and payment history.

Loan against securities

Loan against securities such as Mutual Funds and equity stocks can be availed at a much lower interest rate than a vacation loan or a Personal Loan. Most public sector banks and some private banks offer loan against securities at an average interest rate of 12.5% per annum. To avail this loan, you have to pledge your shares, MFs, or securities as collaterals.

Forex cards

The most inexpensive and convenient way to carry cash abroad in a last-minute plan is through pre-paid forex cards.  Most banks issue these cards at a nominal charge. Foreign currencies are loaded on to these cards as per the exchange rate prevailing on the processing day. These cards can be single currency or multi-currency based on the destination you are travelling to. According to experts, these are best used to make payments for goods and services. However, they should be not be used to withdraw cash at ATMs wherein transaction fees are levied. The best part about forex cards is that you can remit money to the cards anytime over the internet or a phone call, in case you run out of cash.

Crowdfunding

This may be an offbeat alternative, but you can get your trip funded by others. There are fund raising platforms, wherein you can create a profile, script a write-up, upload a video and pictures, and then let your friends, colleagues, and others from the online community come together to fund your travel.

Borrow from family and friends

You can also try borrowing from friends and family if you don’t have a fund ready. However, you must a recovery plan in place. You can also borrow some travel essentials to cut cost.

If you are one of those who makes impromptu travel ideas, then one of these contingency plans might come handy.

(The writer is CEO, BankBazaar.com)