Planning a vacation? Personal Loans vs Credit Cards Comparison vs Buy Now Pay Later
Everyone needs a vacation to relax and take a break from routine life. However, whether it’s a weekend getaway or a longer trip one to two weeks, the holidays can take a heavy toll on the wallet. Therefore, it is always advisable to create and stick to a budget and use the money from your savings to pay for your vacation.
But, which of them is really worth it?
In order to get an answer to this, it is important to understand all of these forms of consumer credit.
All of these credit options are quite similar in nature. Whether it’s a personal loan, credit card, or BNPL – all of which allow consumers to buy services up front with repayment over a set period of time, but what makes them different is ‘is the repayment period and the interest rate, said Amit Chaturvedi, co-founder of Paytail while chatting with CNBC-TV18.
We must therefore make an informed choice taking into account all the factors.
Developing further, Nitin Mathur, CEO of Tavaga Advisory Services, said that a personal loan is an unsecured loan, which can be used to cover all major expenses associated with travel, including airfare, travel organized, hotel costs, etc.
âThe eligibility criteria here mainly include CIBIL score, age, income and work experience. Since one can get the personal loan amount in advance, it helps to better plan trips and avoid overspending, âhe said.
Interest rates are highest for credit cards (in case of deferral).
So, with so many considerations, how does one choose between the three options?
“With good BNPL options one can even get almost interest free loans and with personal loans too (if one has a decent credit history) can get low interest credit much faster than the bank. traditional, âsaid Narain.
However, this may not be true for everyone.
Ultimately, the most suitable financing option will depend on the financing needs – the loan amount, the flexibility requirement, the duration for which funds are sought, etc., said Mathur of Tavaga Advisory Services.
“The point is that whatever option you choose, it is important to make sure that he / she can afford to pay it off before going into debt,” added Mathur.
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(Edited by : Abhishek Jha)