Is it better to travel with financing?

Planning a trip in 2021 is becoming a difficult task to complete mainly because of the budget we have.

When we analyze the market offers in terms of transportation, lodging, food and tourist activities, we are overcome with insecurity and doubts about the trip.

That said, we could state that traveling without a financial budget can generate many complications such as: shortage of money, inaccurate prices and others. Therefore, we elaborate a detailed and accurate financial budget for the trip, taking into account the two most popular financing methods for it: personal loans and credit cards.

A personal loan offers a fixed interest rate, a fixed repayment schedule and a fixed monthly payment, while a credit card allows you to charge travel as you go and repay only the amount you borrow.

We may still be in doubt as to whether this is the wisest decision in the world and which of the two financial instruments is the most suitable for travel. That is why I will give you the following reasons:

You do not have to return it immediately

If you have a job with a low salary, saving money is more complicated and traveling is almost impossible. But for example, using a personal loan you can negotiate the repayment time (requesting grace periods) and the installments to be paid (fixed amount according to income), prioritizing your daily expenses while saving comfortably for the loan.

You have financial flexibility

You can request a loan for an amount greater than the amount adjusted in the financial budget. This will allow us to cover unforeseen travel expenses and when we have extra money we will have the financial capacity to pay for emergency costs. Such travel expenses can be an additional fee on your luggage, hotel services not included in your pension or tourist activities that we need during the trip.

Financial advantages of loans vs. credit cards

Although credit cards are more widely used for travel than personal loans, they are dangerous instruments because they facilitate spending, have higher interest rates than loans, and some cards come with additional annual maintenance and renewal fees.

If you are an impulsive buyer having a credit card can be an eternal debt in which you will suffer economic losses despite enjoying the trip. While for loans we must pay lower fixed interest rates and that is why it is viable to travel.

Lack of financial resources to cover our trip should not prevent us from achieving our planned getaway. The benefits of traveling: reduced stress and improved physical and mental health definitely outweigh the disadvantages of taking a loan, making it worth the risk of debt and better to travel with financing.