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Financing international vacations for your family


When the destination is Goa, taking a vacation is easy. You call up your gang of friends, hop into your car and lo, your weekend vacation has already begun. You need little or no planning for such short trips. But when it comes to international vacations, you need to plan a little more.

In this article, let’s explore the different ways you can finance the foreign trip that has been on your bucket list forever.

Estimate how much the trip is going to cost you

Alright, you have decided to take a vacation abroad. But where do you want to go? Italy, Greece or perhaps the whole European shebang. Once you have decided the destination, you can make a list of the expenses involved. This includes costs for transportation, food, hotels and sightseeing. Don’t forget to include the different costs regarding any special activities you may undertake. For example, if you visit the Santorini Island in Greece, you don’t want to miss the scuba diving or the hot air balloon rides. These activities are fun but they can be expensive. So, make sure they are included in the budget.

Different options to finance your vacation

Once you have calculated the different costs involved, you can identify the best options to finance your vacation.

  • Personal loan

Taking a loan for financing a vacation might sound like an unorthodox option. However, it is a very popular option these days. A personal loan is easy to avail and the documentation is minimal. In fact, you can apply for a loan online and obtain approval instantly. Many banks and non-banking finance companies (NBFCs) offer attractive rates of interest on these loans. By taking a personal loan, you can enjoy a vacation without disturbing your retirement fund.

  • Mutual funds

Vacations are a great time to relax with friends and family. However, they can be expensive. And in India, vacations are a luxury more than a necessity. That’s why, it is always better to invest specifically towards this goal instead of using funds from your savings or your retirement fund.

If you have planned to take a vacation in the near future, it can be a good idea to invest your money in mutual funds. This option helps you create a lump sum. When you know the time period and the amount of money you need, you can start investing accordingly to create the required lump sum at the right time. There are different options available based on the time period.

Here are a few options

  • Short-term debt funds

In case your vacation is in the immediate future, say 6-12 months, liquid funds or short-term debt funds are suitable for you. These funds ensure capital protection so you don’t have to worry about loss of the invested amount. Also, you can withdraw your funds whenever you wish since there is no exit load. And when it comes to returns, these funds offer much higher returns when compared to bank deposits. While most banks offer around 7% per annum, short-term debt funds offer annual returns of around 10%.

  • Debt funds

In case you have a longer period of time before the vacation, say, like 3-4 years, you can invest in debt funds. These funds invest in securities such as debentures, corporate bonds, commercial papers and government securities. As a result, debt funds are considered safer than equity funds. They protect your investment capital and offer steady returns.  By planning accordingly, you can create the vacation fund without worrying about loss of your capital.

  • Invest in SIPs

In case you have invested in mutual funds, you can consider using these funds to finance your vacation. However, make sure that this does not interfere with other investment goals such as retirement or buying a house.

By planning well ahead in time, you can also start investing in Systematic Investment Plans (SIPs). By steadily investing in the fund each month, you can create a substantial sum for your trip in the future. With a SIP in place, you don’t need to worry about funds for your trip anymore.


Taking a vacation in a foreign country can be an expensive affair. But that does not mean you cannot finance it. There are many options available. Explore the different options and choose what is best for you and your family. So start planning and start investing!

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