Key Highlights
- TNPL allows travelers to spread out payments for their trips, focusing on aspirations and experiences rather than budget constraints.
- Consider factors like repayment periods, interest rates, and credit scores before opting for TNPL.
- TNPL loans vary in size and repayment time, offering flexibility for different travel needs.
he resurgence of travel after pandemic restrictions has given rise to a new financing trend: Travel Now Pay Later (TNPL). As travelers seek convenient ways to fund their trips and break free from budget constraints, TNPL has become an attractive option. In this article, we'll explore the impact of TNPL on travel budget decisions, its pros and cons, and what you need to consider before opting for it.
1. Understanding Travel Now Pay Later (TNPL)
Travel Now Pay Later (TNPL) is a financing concept similar to Buy Now Pay Later (BNPL) schemes, enabling travelers to book and enjoy their trips while making easy monthly payments. Prominent travel aggregators like MakeMyTrip and Expedia now offer TNPL options, making it easier for people to embark on their dream vacations without worrying about immediate financial burdens.
2. How TNPL Is Shaping Travel Budget Decisions
Traditionally, travel plans were made within fixed budgets, but TNPL has shifted the focus towards fulfilling aspirations and experiences, regardless of the cost. Demographics and economic conditions influence this shift, particularly in major cities and Tier-I and Tier-II cities, where higher disposable incomes make travel loans an appealing choice.
3. What to Be Cautious About When Availing TNPL
While TNPL offers an accessible and straightforward solution for financing your travels, it's essential to exercise caution. Most TNPL schemes have short repayment periods and can accrue substantial interest if payments are delayed. Missed repayments can also adversely affect your credit profile.
4. CIBIL Score Requirements for TNPL Loans
TNPL loans are available with minimal paperwork, but a healthy credit profile and a high credit score can unlock various loan options. Your CIBIL score plays a pivotal role in determining the loan terms and interest rates you qualify for.
5. Typical Loan Size and Repayment Time for TNPL
TNPL loans cater to a wide range of travelers, with loan sizes starting as low as Rs. 10,000 and going up to substantial amounts. Smaller loans typically don't require collateral or a guarantor, while larger loans might necessitate these additional assurances.
The maximum repayment period for TNPL loans is six years, giving borrowers the freedom to select suitable loan amounts and durations based on their travel requirements and repayment abilities.
While TNPL can make your travel dreams a reality, it's essential to consider the associated terms, your creditworthiness, and the overall impact on your finances. Travelers should weigh the pros and cons carefully before opting for this financing option.
