- Date : 29/09/2023
- Read: 3 mins
Choosing between financing travel through TNPL schemes or using savings relies on your financial situation and trip urgency. Exercise caution with TNPL and deliberate before use.
Travel Now, Pay Later (TNPL) offerings boomed after the travel restrictions imposed during the pandemic were raised. They offer travellers access, convenience, and flexibility in payments. However, there are alleviating concerns about how such offerings impact travel budgets. Let's discuss.
Highlights:
- TNPL offerings allow travellers to fund their travel on credit and repay later in attractive instalment plans.
- You need a healthy credit score to become eligible for a TNPL scheme.
- While TNPL schemes are convenient, they come with short repayment cycles and high interest rates.
Also Read: Why opt for "Travel Now, Pay Later" schemes while travelling
What is Travel Now, Pay Later (TNPL)?
TNPL is similar to Buy Now, Pay Later (BNPL) schemes. A TNPL scheme allows you to fund travel through a pay-later financing option. On the other hand, a BNPL scheme allows customers to buy products and pay for them in easy monthly instalments later.
Expedia and Make My Trip (MMT) are some travel aggregators already offering their customers such schemes.
You must have a high credit score and a healthy credit history to qualify for TNPL schemes. A typical TNPL loan can start as low as ten thousand and extend to larger amounts. Depending on the loan amount, such loans may be available with or without a collateral or guarantor.
Impact of TNPL schemes on your budget
The holiday cum festive season is here, and many of us will be planning trips or have travel plans. Should you opt for a TNPL scheme, you must know the related pros and cons.
Pros:
1. Convenience and flexibility
You won't have to restrict your travel choices due to financial restraints. TNPL offers the convenience of paying later and enjoying trips beyond your means.
2. Customisations
Banks, travel aggregators, and companies offer TNPL schemes with customisable loan and repayment options and attractive perks.
Cons:
1. Increased focus on aspirations than budget
Earlier, people used to make travel plans based on the available funds and how much their budget was. The plans with underlying TNPL schemes focus on aspirations and experience.
2. A greater inclination for travel loans
The TNPL trend is more widespread in Tier-1 and Tier-2 cities, where individuals have a higher disposable income and do not shy away from travel loans.
Also Read: Why cancelling your travel reservations is better than rescheduling
Things to keep in mind
TNPL offerings are seeing acceptance among consumers, but they require caution. Non-payment or delays of instalments can impact your credit scores.
TNPL schemes can adversely impact your overall budget as they come with high interest rates and short repayment tenure. Read the hidden payment terms and penalties for delays before financing your travel with TNPL.
Click here for the latest articles on financial planning.
