Travel Now Pay Later: Boon Or Curse? And, Here’s What You Should Be Careful About While Availing Of TNPL

by Rachna Srivastava
Travel Now Pay Later: Boon Or Curse? And, Here’s What You Should Be Careful About While Availing Of TNPL

*checks a place out on Instagram*

*mesermised by it, immediately wanderlusts to head there*

*looks at bank balance and savings, and sighs*

Does this look like your usual shindig? Well, we all have been there and done that. No, this is not for travel bloggers and people whose lives revolve around travelling for work. We are talking about wanderlust-ers and folks who want to travel but cannot. But here are four words that pique their interest – Travel Now Pay Later (TNPL).

To a layman, it is not really very different from going shopping with your credit card and picking up what you like, only to pay the dues later in the month. Consider it a type of travel loan. And, yeah the words are pretty self-explanatory.

Travel Now Pay Later All Set To Revolutionise The Travel Space?

Travel International
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There is no denying that people are intrigued by it. In fact, many fintech, travel companies and travel aggregators are seeing a sharp rise in TNPL schemes and young travellers making the most of it.

IRCTC and CASHe have partnered up for a later pay facility for people travelling by train. Flights can also be booked using these. Many companies are curating itineraries and packages with TNPL as their USP, thereby enticing ‘travel-philes’. Travel lovers are fearlessly checking off places from their bucket lists and want to add more because now they seem affordable.

Also Read: Got No Cash? These Are The Services That Allow You To Travel Now Pay Later

What’s The Repayment Model Like?

Buy Now Pay Later
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Just like any credit card or short-term loan, Travel Now Pay Later services come with a promise of easy and affordable EMIs. That is the biggest pull. The TNPL scheme has a repayment period of 30 days to up to six months or more.

Like on IRCTC travel app, one can easily use the TNPL payment option for booking and paying for train tickets. Additionally, CASHe’s TNPL option automatically qualifies all its users to avail of the TNPL facility sans any additional documentation.

Similarly, Thomas Cook allows you to pay 10% amount upfront and the remaining 90% once your final documentation is done. MakeMyTrip allows you even more flexibility. Like, you can choose an EMI spanning over 12 months also with your Credit Card’s “No Cost EMI” plan as well.

HDFC bank has FlexiPay option, wherein your first 15 days are interest-free. You can pick a repayment plan from 30, 60 or even 90 days. But customers have to pay Rs 70 a month if the purchase is over Rs 3000.

Also Read: Travel Now, Pay Later Is India’s Favourite Option To Fund International Trips

What Should You Be Careful About While Availing Travel Now Pay Later scheme?

Risks with Travel Now Pay Later
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To broadly sum up, TNPL comes with high-interest rates, there are non-refundable deposits involved, and there are not many consumer protection laws that will come to your aid if things go awry.

Many companies will ask for a percentage of the trip (Indian or International) to be paid upfront at the time of booking. That deposit or downpayment is non-refundable. In case you end up not taking the trip or you change or cancel or alter your plans, that deposit is not coming back. And, you may have to pay up additional fees or penalties.

Late payment stress for Travel Now Pay Later
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Yashoraj Tyagi, Chief Business Officer and Chief Technology Officer at CASHe, says, “TNPL allows you to establish a deferred payment plan with the merchant. You agree to repay the amount after a stipulated period. This is a new way to fund your travel plans, and while it is a popular payment method in many countries, it is relatively new to India.”

He adds, “The idea behind TNPL is to give consumers the ability to delay payment for what they need, without incurring interest on their purchases. When you sign up for TNPL apps, you agree to pay the aggregator the amount you have spent from your credit limit after a specified amount of time. However you need to keep a few things in mind if your bill repayment is not done on time, you can incur some late charges.”

Also Read: Here’s How To Use ‘Travel Now & Pay Later’ Services While Planning A Trip

Travelling is highly addictive, we all know. But is TNPL something that can lead to impulse buying?

To that, Tyagi adds, “Having access to ready credit can often lead to impulsive purchases. Using TNPL services means you won’t be paying out of pocket immediately, which can make people eager to spend more than their allocated budget. It is important to keep track of your personal finances, so you are not spending more than you can.”

Impulse buying
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To add more insights and lean into Indian consumer behaviour, we even spoke to Bhavin Patel, Co-founder and CEO of LenDenClub. He says, “India’s digital travel purchase behaviour has undergone a substantial transition since September 2020. These days, a sizable number of people use such services online. However, they prefer payment plans like ‘travel now pay later’ or ‘save now and travel later’ when they don’t have enough cash on hand.”

Also Read: What Is Shoulder Season? Here’s Why You Should Travel During Shoulder Season

Reflecting further, Bhavin says, “Both of these services are rapidly growing in popularity in India, and we anticipate that demand for Travel Now and Pay Later will continue to rise.”

Deferred payments are a reason to worry. Patel further adds,  “Users need to avail of these loans carefully. Non-repayment or late repayment will not only result in additional fees but might impact one’s credit score as it infers that you are unable to repay your debts on time.”

Credit Score
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Another very important thing to consider is reading the fine print. The terms and conditions have to be thoroughly read and understood before booking any trip or availing of TNPL service. You wouldn’t want to shell out for unexpected fees or charges.

Also Read: Short On Funds? Travel Now And Pay Later For Your Flights And Hotels

Is It A Boon Or Yet Another Curse?

Yes, TNPL is highly convenient. But there is certainly risk involved. These pay-later options may seem like a great way to book your next vacation or trip, but there are important things to consider before taking advantage of this type of financing. It is best suited for people, who have already saved up for trips and want to just defer payment to make use of the flexibility.

Travel Fund
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Many would say, they love to travel the old-fashioned way. Many are enticed by the promise of delayed payment, but certainly, catch that caution in the wind and don’t throw that away when availing of something we fully don’t understand or are still trying to come to terms with.

So, you tell us – Is Travel Now Pay Later really a boon or yet another curse?

Let us know in the comments section below.