We’re all going on a summer holiday, no more working for a week or two.
Fun and laughter on our summer holiday, no more worries for me or you, for a week or two.
We’re going where the sun shines brightly, we’re going where the sea is blue.
We’ve all seen it on the movies, now let’s see if it’s true

— Cliff Richard

Holiday abroad: it’s one great dream for every Indian. Just when everyone else is preparing for another scorching summer and aestivation — that’s spending summer in a state of torpor — seems the only disagreeable option, some people are poring over travel brochures in search of a temporary haven in a faraway land.

Planning a summer vacation is half the fun: the prospect of beating the heat and putting all those worries stemming from the close of the financial year and the annual exams of your school-going kids behind you is something truly to wish for.

Here’s a rundown on how you can finance your dream holiday.

Dig into your savings

Shop around for the best deal and start arranging your finances. If you are planning a year ahead, think about these; What is the current cost of the tour? How much do you expect the tour price to rise by the time you take it? What will be the additional expenses? How much have you saved? How much more do you need? Where should you invest that spare moolah to eke out an additional return?

You should choose an investment instrument with a horizon that matches your plan.

Go, get a loan

If you are the impulsive kind, go on a loan hunt and get the best interest rate bargain by haggling with the banks. You can go for either secured or unsecured loans.

Banks provide unsecured personal loans to eligible applicants based on income documentation or a good credit record. Eligibility criteria for these loans vary among financiers but typically, your age should be between 21 and 60, and you should have an income in the range or Rs 1 to 1.20 lakh per annum. You can repay these loans within 12 to 36 months. No security or guarantee is required and documentation and processing is simple. But stay warned: the effective interest rates are high and can go all the way up to 26 per cent.

You can also take a loan against certain securities such as listed shares and other approved securities. The interest rate for this is lower, typically in the range of 10 to 12 per cent.

Stay with your agent

If you do not want to take the hassle of negotiating with various banks, then you can take the benefit of the tie-ups, which your travel agent already has with various banks.

Cox and Kings has a ‘Travel now, Pay later’ scheme supported by UTI Bank and Citibank. UTI offers loans against income documents whereas Citibank offers a zero-per-cent three-EMI scheme on the Citibank Credit Card or Diners Club International Card. Thomas Cook offers an ‘Enjoy today, Pay tomorrow’ scheme where Citibank provides holiday finance. Kuoni Travel, represented by SOTC, has a tie-up with Kotak Mahindra Bank.

Although you could negotiate a lower interest rate by approaching your bank directly, remember that they will charge a processing fee of between 1 and 2 per cent of the loan amount. But by routing your personal loan through a travel company, you can slash your processing fee to about 0.5 per cent. Moreover, the paperwork and documentation is a lot simpler.

Early Bird Awards

All through the year, both during peak and slack seasons, several agencies offer luscious discounts in collaboration with other institutions.