Travel Loan

A vacation or travel loan is a personal loan that you can use for the purpose of meeting expenses related to a vacation. Only a few lenders offer travel loans as variants of personal loans. Still, you can use the proceeds of personal loans to pay for your travel expenses, especially from lenders who do not offer travel loans but personal loans at attractive interest rates. This is because personal loans come with no-end restrictions except for speculative purposes.

Updated: 16-05-2025 13:35:11 PM

Top Banks/NBFCs Offering Personal Loan for Travel – Paisabazaar

HDFC Bank

Max. Loan Amt.

Up to ₹40L

Rate of Interest

10.9% - 24%

Tenure up to

Upto 6 Years

Processing Fee

₹6,500

10 Second Disbursal* 100% Digital Process* Quick Disbursal

Axis Bank

Max. Loan Amt.

Up to ₹10L

Rate of Interest

11.25% - 22%

Tenure up to

Upto 5 Years

Processing Fee

Upto 2%

Low Processing fee

Kotak Mahindra Bank

Max. Loan Amt.

Up to ₹35L

Rate of Interest

10.99% - 16.9%

Tenure up to

Upto 6 Years

Processing Fee

Upto 5%

Lowest Income requirement 100% Digital Process*

IDFC FIRST Bank

Max. Loan Amt.

Up to ₹10L

Rate of Interest

10.7% - 23.99%

Tenure up to

Upto 5 Years

Processing Fee

Upto 2%

Max Loan Amount 100% Digital Process*

ICICI Bank

Max. Loan Amt.

Up to ₹50L

Rate of Interest

10.85% - 16.65%

Tenure up to

1-6 Years

Processing Fee

Upto 2%

100% Digital Process* Quick Disbursal

What is a Travel Loan?

A travel loan, also known as vacation loan or holiday loan, is a personal loan variant offered specifically for covering travel or holiday expenses. The other features of travel loans, such as their interest rates, tenures, processing fees, unsecured nature, etc are the same as regular personal loans.

Travel Loan Interest Rate in India

Very few lenders offer unsecured travel loans as a separate loan category. Even lenders which do, usually charge the same interest rates as their regular personal loans, which usually starts from 10.50% p.a. Moreover, the proceeds of regular personal loans can be used for financing travel-related expenditures. Hence, prospective applicants should compare personal loan interest rates offered by various lenders to find the best deal for financing their travel plans.

Personal Loan for Travel – How Much Can You Borrow?

The maximum loan amount offered to a travel loan applicant would primarily depend on his/her repayment capacity, subject to the upper limits set by the lender. When determining the maximum eligible loan amount, some lenders use methods like the EMI/NMI Ratio, wherein the total EMI obligations should not exceed a predetermined proportion, usually 50-60% of the applicant’s monthly income. Other lenders use the Multiplier Method, wherein the loan amount is determined based on a pre-set multiple, ranging from 10 to 24 times, of an applicant’s net monthly income. Some lenders may use a combination of both methods to determine the maximum loan eligibility.

Tips to Get Travel Loans at Lower Interest Rates

To secure personal loans for travel at low interest rates, follow these tips:

Maintain a credit score of at least 750
Check for pre-approved personal/travel loan offers from banks and NBFCs
Check for personal/travel loan offers from lenders where you hold deposits or have existing loans/credit cards
Keep a track of interest rate concessions offered during festive season
Compare loan offers from multiple lenders on online financial marketplaces

Documents Required for Availing a Travel Loan

The documents required to apply for unsecured travel loans or personal loans for travel are more or less the same across lenders. A few common documents are listed as below:

Proof of Identity: Passport, voter ID, driving license, Aadhaar card or PAN card
Proof of Residence: Aadhaar card, voter ID, passport or utility bills
Proof of Income:
- For Salaried: Salary slips, bank statements, Form 16
- For Self-employed: Previous years’ ITR, P&L statement and balance sheet, bank statements

Personal Loan for Travel – Eligibility Criteria

The eligibility criteria set for travel loans is more or less same as that of personal loans. Here are some of the common set of eligibility criteria used by most lenders:

Age: 18 – 60 years
Salary: At least Rs 15,000 per month for salaried customers
Income: At least Rs 5 lakh p.a. for self-employed customers
Credit Score: Preferably 750 and above
Employment Stability: Usually 1 year with some lenders requiring longer work experience
Business Continuity: Usually 3 years of business continuity with some lenders requiring longer period of business continuity
Employment Type: Salaried employees working with government, public sector undertakings, MNCs and other reputed corporates

Travel Loan vs. Credit Card Loan – Which is Better?

The interest rates of a credit card loan is usually higher than personal loan interest rates offered by any lender to the same individual. Thus, the borrowing cost would be higher for those availing credit card loans for their travel expenses.

As credit card loans are essentially pre-approved in nature, they are usually disbursed within a few hours or at least on the same day of making the loan application, with zero documentation. Thus, those who are ineligible for pre-approved personal loans or if the turnaround time of the offered personal loan is not matching their requirements should consider availing credit card loans.

FAQs on Travel Loan

What is the interest rate for Personal Loan for Travel?

Prospective applicants can avail personal loan for travel/holiday related expenses at interest rates starting from 10.50% p.a. onwards depending on their credit profile and the lender opted for. However, some public sector banks may offer lower interest rates on personal loans availed for financing travel/vacations.

What is the lowest travel loan interest rate available?

Personal loans availed for travel expenses usually start from 10.50% p.a., with some public sector banks offering even lower rates. However, the final interest rate offered depends on several factors, including the lender’s credit risk policies and the applicant’s credit score, income and repayment capacity.

Can I apply for a personal loan for travel with a low credit score?

Yes, you can apply for a travel loan with a low credit score, but your chances of approval might be lower, and the interest rate charged may be higher. A credit score of 750 or above is usually recommended to avail better offers and lower interest rates.

What is the minimum salary required for a vacation loan?

Most lenders require a minimum monthly salary of Rs. 15,000 to be eligible for a vacation or travel loan. However, the exact income requirement can vary depending on the bank or NBFC and your location.

How long does it take to get a travel loan approved?

Travel loans can be approved within 24 to 48 hours if all documents are in place and the applicant meets the eligibility criteria. Some lenders may even offer instant or same-day loan disbursal for pre-approved applicants.

Can I get a personal loan for travel without a salary slip?

While salary slips are typically required for salaried applicants, some lenders may accept alternative income proofs like bank statements or Form 16. Self-employed individuals can apply using their ITRs and financial statements.

Which bank offers the best interest rates for travel loans?

Banks like SBI, HDFC Bank, Axis Bank, ICICI Bank and select NBFCs often offer competitive interest rates on travel loans. The best interest rate depends on your creditworthiness, income and relationship with the bank.

How much loan can I get for an international vacation?

The loan amount primarily depends on your income and repayment capacity. Lenders typically offer up to Rs. 25 lakh and the actual eligible amount is determined using methods like the EMI/NMI ratio or income multiplier method or a combination of both.

Can I prepay my travel loan before the tenure ends?

Yes, most lenders allow prepayment or foreclosure of your travel loan. However, a prepayment charge of 2-5% may apply in case of fixed-rate loans and also depending on the lender’s credit policy. Always check the terms before making the application.

Is it better to use a credit card or a vacation loan for travel expenses?

While credit cards offer quick access to funds, their interest rates are usually much higher than personal loan interest rates. A travel loan is more cost-effective for larger travel expenses or longer repayment tenures.

What happens if I miss an EMI payment on my travel loan?

Missing an EMI may lead to late payment penalties, impact your credit score and result in follow-up calls from the lender. It’s advisable to inform the lender in advance and opt for EMI rescheduling, if necessary.

What is the repayment tenure for a personal loan for travel?

The typical repayment tenure for travel loans ranges from 1 to 5 years. However, some lenders offer extended tenures of up to 6–8 years, based on the applicant’s profile and loan amount.

Can self-employed individuals apply for a travel loan?

Yes, self-employed individuals are eligible for travel loans, provided they meet the income and documentation requirements. Lenders usually require at least 3 years of business continuity, along with ITRs and financial statements.

Does a travel loan cover flight tickets and hotel bookings?

Yes, travel loans can be used to cover a wide range of expenses including flight tickets, hotel stays, visa fees, sightseeing tours, local transport and even travel insurance. There are no specific usage restrictions except for speculative activities.