“Mumbai airport June air traffic at 107% of pre-covid level” – i.e. 4.2 million passengers!
“1 in 5 personal loans for the travel bug.”
Two headlines that immediately caught my attention, back-to-back.
The fact that over-tourism is happening, and people are traveling as if there is no tomorrow, is not a secret. Even mountains and hills are becoming crowded, and it seems like not a single peak has been left unconquered.
Social media is flooded with pictures accompanied by captions like YOLO (You Only Live Once), Carpe Diem (Seize the Day), and various other inspirational travel quotes. Thus, I can understand the intense pressure to be seen at the ‘happening’ locations.
To keep up with the trend, you might be tempted to take a loan to fund your travel plans. However, before making that decision, take a moment to consider this simple comparison between taking a loan and investing for the same purpose.
Personal Loan Calculation
| Loan Amount (Rs.) | Interest Rate | EMI(Rs.) | No. Years | Total Amount returned (Rs.) |
| 300,000 | 11% | 6523 | 5 | 391,364 |
| 500,000 | 11% | 10871 | 5 | 652.273 |
If the same amount (EMI amount) were to be invested in a suitable Equity Fund /Balanced Fund (suitable as per your risk capacity and tenure) via the Systematic Investment route (SIP) then the calculations are as below;
| SIP Amount (Rs.) | Avg Returns * | No. Years | Total Amount invested (Rs.) | Market Value (Rs.) |
| 6500 | 11% | 5 | 390,000 | 521,605 |
| 10800 | 11% | 5 | 648,000 | 866,668 |
You may argue that loans are for a shorter tenure, so let’s look at an example;
| Loan Amount (Rs.) | Interest Rate | EMI(Rs.) | No. Years | Total Amount returned (Rs) |
| 300,000 | 11% | 9822 | 3 | 353,578 |
| 500,000 | 11% | 16369 | 3 | 589,297 |
| SIP Amount (Rs.) | Avg Returns * | No. Years | Total Amount invested (Rs.) | Market Value (Rs.) |
| 9800 | 9% | 3 | 352,800 | 406,321 |
| 16300 | 9% | 3 | 586,800 | 675,820 |
The numbers speak for themselves; no further explanation is necessary.
But you wouldn’t want to do this, because it means you have to delay your travel plans, and according to social media- everything has to be done today!
It’s crucial to understand that there’s nothing genuinely ‘social’ about social media; in reality, it’s ‘commercial’ media. Travel bloggers, influencers, and personalities are all there for commercial reasons.
So, please don’t get carried away. Make decisions that are right for you. With the investment plan mentioned above, you can achieve so much more – travel comfortably, perhaps even more frequently, to better locations, and, most importantly, without the burden of debt.
To achieve this, you need discipline, patience, and the ability to delay gratification. Be proactive with your finances and make your money work for you. Engage in financial planning and goal-based investing.
While loans are readily available, they come at a cost, some higher than others. Some purchases, such as a home, vehicle, or higher education, may necessitate a loan. However, taking a loan for a holiday is clearly living beyond your means.
You have all the resources to make informed financial decisions. There are advisors to guide you, apps to provide transactional convenience, and, most importantly, financial products designed to enhance your life. So, take charge of your financial future and make choices that align with your long-term well-being.
* Mutual Funds are subject market Risk. The average returns mentioned above are based on past performance, and not guaranteed in any way.
Womoneya 
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