If you have plans for an upcoming vacation but find yourself constrained by financial considerations, the option of choosing a Travel Now Pay Later (TNPL) scheme might be tempting.
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These schemes bear resemblance to Buy Now Pay Later (BNPL) programs, which allow consumers to make a purchase upfront and subsequently settle the payment through manageable monthly installments spread over a few months or a year.
Numerous travel aggregators, including prominent names like MakeMyTrip and EaseMyTrip, offer these schemes through partnerships with fintech companies or NBFCs (non-banking financial corporations).
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While the specific financial terms may differ across various platforms, these schemes often provide zero-interest financing options when the entire sum is repaid within a relatively short timeframe, typically 30 to 45 days.
However, when the loan amount is divided into equated monthly installments (EMIs) over an extended period, the loan accrues a higher interest rate ranging from 18 to 25 percent.
The question that arises is: Should travel enthusiasts embrace these schemes or should they reconsider their travel plans altogether?
Ideally, travel financing options should be approached distinctively from other forms of financing, such as those for homes, cars, or even shopping. While some expenditures demand immediate attention, allowing financing to address them without postponement, travel expenses generally fall into the category of discretionary spending that can be deferred.
In the event that you are contemplating the Travel Now Pay Later (TNPL) option, it’s imperative to consider the following key factors:
- If postponing your travel until you’ve accumulated sufficient funds is a viable option, then deferring the Travel Now Pay Later (TNPL) scheme could be a prudent decision.
- Should your travel plans be time-sensitive, ensure timely repayment of the installments. Failure to do so might negatively impact your credit score.
- Prior to committing to these schemes, acknowledge the prospect of repaying the loan at a considerably higher interest rate if you choose the installment route.
- Most importantly, refrain from adding to your financial obligations with Travel Now Pay Later (TNPL) if you are already managing multiple installment commitments. It’s advisable to prioritize settling existing debts before incurring new ones, especially for discretionary expenditures like travel.
In summary, certain travel aggregators present appealing financing alternatives, enabling travelers to manage their travel expenses through convenient installments. However, exercising caution is paramount due to the elevated interest rate associated with such arrangements and their potential influence on your credit score.
Frequently Asked Questions (FAQ) – Travel Now Pay Later
1. What is Travel Now Pay Later (TNPL)?
Travel Now Pay Later (TNPL) is a financial program that enables individuals to book and enjoy their travel plans upfront while deferring the payment to a later date through manageable installment payments.
2. How does TNPL operate?
TNPL provides travelers with the option to secure their travel bookings immediately and then spread the total cost over a specified period, typically through equated monthly installments (EMIs).
3. What travel expenses can be covered under TNPL ?
TNPL covers a diverse range of travel expenses, encompassing flights, accommodations, transportation, tours, and related costs. This facilitates easier planning and enjoyment of travel experiences.
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4. Are there any interest charges associated with TNPL?
Interest charges may vary based on the provider and scheme terms. Some TNPL offerings include zero-interest financing if the entire amount is repaid within a specific timeframe, while others may involve interest charges.
5. How can I apply for TNPL?
To apply for TNPL, you typically need to visit the website or platform of a participating travel aggregator or financial institution offering the program. Complete the necessary application, provide required documents, and await approval.
6. What are the advantages of utilizing TNPL ?
TNPL empowers you to embrace your travel aspirations without the immediate burden of full upfront payment. It provides financial flexibility and enables you to embark on your desired journeys without delay.
7. Is a good credit score essential for TNPL ?
While a favorable credit score can enhance approval chances and potentially lead to better terms, certain TNPL options may be accessible to individuals with varying credit scores. It’s advisable to review the specific eligibility criteria of the program.
8. What are the consequences of missing an installment payment?
Failure to make an installment payment on time could result in late fees or penalties, contingent on the terms of the TNPL program. Moreover, it might adversely impact your credit score.
9. Can I utilize TNPL for various types of travel bookings?
Absolutely, TNPL typically encompasses a wide array of travel choices, including both domestic and international flights, hotels, vacation packages, tours, and activities. This allows you to tailor your travel experience to your preferences.
10. Should I opt for TNPL or save up for my trip in advance?
The decision between TNPL and advance savings depends on your financial circumstances and travel urgency. If feasible, saving and planning ahead is recommended. However, if you’re eager to travel and the Travel Now Pay Later (TNPL) terms align with your budget, it can be a viable option.
11. Can I modify or cancel a Travel Now Pay Later (TNPL) booking ?
Policies regarding modifications and cancellations can vary based on the travel aggregator or provider offering TNPL. It’s crucial to review the terms and conditions before proceeding with a booking through the program.
12. How does TNPL impact my overall financial well-being?
While Travel Now Pay Later (TNPL) offers convenience, it’s important to consider its implications for your financial commitments and credit score. Responsible usage and timely repayments are pivotal for maintaining a healthy financial profile.
Prior to making any commitments, ensure a comprehensive understanding of the program’s terms, interest rates, and repayment schedule. This will enable an informed and thoughtful decision regarding travel financing.