All of us deserve some time away from our life grind at least once, every year. Whether it’s a solo trip, a relaxing vacation with spouse, or a full-fledged family getaway, the mere thought of traveling is rejuvenating – until it all comes down to calculating the cost of flight tickets, hotel bookings, food, shopping and more. So if you are tight on budget but your brain is craving vacay time, then these are the only 5 tips you need to finance your travel dreams.  

1 – Rack up Reward Points on Credit Cards and Fund the Travel to Your Favorite Destination

Credit cards come with big discounts on airlines and hotels and offer attractive rewards on travel-related purchases. While the trips are not free, the reward points can cover almost 70% of your costs! So research credit card offers and maximize your benefits.

However, the average interest rate on credit cards is around 15%; a personal line of credit for traveling is a more affordable way to quench your wanderlust. 

2 – Consider a Collateral-free Personal Line of Credit for Travelling Worry-Free!

When you need money on an urgent basis, a personal line of credit makes for a viable option. Just like a personal loan, a personal line of credit is an unsecured loan but it comes with flexible EMI options and convenient payment periods. And the best part is – unlike a personal loan, a personal line of credit charges interest only on the amount you use!

So, if you don’t know the exact amount of money you will spend on your vacation then taking a personal line of credit for traveling makes perfect sense. With a personal line of credit, the money will always be handy. You can borrow any amount you need anytime, anywhere without having to pay interest on your entire approved limit from day 1!  

3 – Take a Personal Loan to Avoid a Big Upfront Payment

Personal loans impose no restrictions on the usage of funds. Taking a personal loan for a vacation needs no security and the repayment tenure can be extended for as long as 5-10 years. However, in case of personal loan, the interest rate is charged on the entire amount that is disbursed to the borrower. Also, the closing cost may be relatively higher than a personal line of credit due to higher interest rates.  

4 – Start a Savings Account in Advance to Pay for Your Holidays

If traveling is your life-long plan, then you need to save in advance. Stash a portion of your pay every month into a savings account and when you have accumulated adequate cash, you can take a vacation! It is surely a smart move to save first and spend later but your life may not always go as you have planned. So, use these 6 money-saving tips to create your travel budget.   

5 – Opt for Travel Payment Plans to Take a Vacation on a Tight Budget  

Travel payment plans have gained a lot of popularity and preference in the recent years. People are now taking vacations even on a tight budget with travel payment plans that are offered by independent travel agencies. Travel payment plans are also available directly through cruise lines, resorts, and online travel agents.

You can book your vacation up to 10 months in advance and repay the outstanding amount over time if you are using travel payment plans. These plans have a fee for spreading out the repayments but there is no interest charged like there is, on personal loans and credit cards. However, travel payment plans only cover accommodation so you may need to bear the entire cost of the airfare upfront depending on the channel that you choose to secure your travel plan.

In today’s fast-paced, demanding life, refreshing vacations are an absolute necessity. So if you want to go on a vacation, don’t let the cash crunch hold you back. Choose any of these 5 financing options and make your dream holiday affordable.

Just in time for the start of travel season! This informative article was contributed to Leisure Freak by Shiv Nanda.   

Author Bio:

Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics.