written by | March 23, 2022

How to Apply for a Loan for a Travel Agency

India is among the top tourist attracting countries in the world. It won't be any surprise if we add that India's tourism industry contributes to one of the biggest parts of its GDP. In 2020, this amount was jaw-dropping USD 7,438 million. There was a booming growth in this industry after the Covid era, and very few industries managed to show such growth in India. After reading that, setting up a travel agency seems to be a very bright idea. 

But what would you do about funding? You can't set up a travel agency without capital investment for sure. What about availing a travel agency loan to sort out funding issues? Those were too many questions to answer. Right? Let's start answering them all one by one in this post! Keep reading!

Did you know?

The factors you need to consider after getting a travel agency loan include 

  • setting up office space and the overall infrastructure of the agency 
  • acquiring a required licence
  • setting up booking facilities 
  • maintaining consistent capital to continue operating
  • hiring employees and paying them
  • marketing your business in the right channels

Why Start a Travel Agency Business in India?

Undoubtedly, you begin any business with one core reason: earning money. But why exactly a travel agency business? Let's understand some main reasons:

The Travel Industry Is Resilient

We know that tourism is extremely resilient. The world has opened again after Covid-19, and the travel industry has thrived rapidly after that. Demand for trips is expected to be high. Speed of bookings is increasing day by day, and travel consultants will be the key to the rebirth of the travel business

High Profit From the Demand in Travel 

Starting a new business and running isn't something that can be done every day. If you're considering opening a travel agency, it is the perfect time to lay the foundation of your company and get training and understand the specifics of the business. That way, you'll be ready to profit from the growth in travel shortly. 

The Value of a Travel Agent Is at an All-Time High

Being a travel consultant is more than being aware of the latest destinations for travel. Also, they must have a proper sense of making a travelling agency business plan. Advisors guard their clients' investments in travel. When travel restrictions came into force, travel agents fought for their clients to bring their luggage safely home and receive credits or refunds to use for future travel.

Travellers who decided to book without consulting a travel expert were often stuck on hold for hours, with limited choices. Travel agents play a crucial part in providing information regarding safe places and activities and protecting travellers' investments. 
Also Read: How to Apply for the Best Business Loan in India? - Types of Govt. Loan Schemes

How to Apply for a Loan for Travel Agency in India?

Availing of a business loan for your travel agency in India is as easy as most other business loans. You can decide to visit the bank's branch close by or carry the whole process online. If you physically visit the branch, the bank's representative will heal you throughout the process. Let it be filling the loan application, submitting the vital documents, explaining the interest rate, repaying tenure, etc. 

While carrying out the process physically, you carry the first two steps (filling out an application and submitting documents) online. Then, the bank representative contacts you to assist you further. Once you pass the eligibility criteria and submit documents (Aadhar/PAN card, residence proof, income tax return, etc.), the other process is of just 3-10 days. 

Why Would You Need Funding?

If you're going to set up a travel agency, be ready for meticulous planning and pay attention to multiple details such as developing an online platform (website), carrying out your agency's marketing needs, etc. You'll have to meet several regulations of the Indian government, railways and airlines. So, you're going to need funding for many instances while setting up your travel agency. Following are the aspects:

  • Setting up the office space and infrastructure.
  •  Maintaining a continuous inflow of working capital to ensure smoothness of all the operations. 
  • Acquiring GST registration and various additional licences are needed.
  • Setting up online and offline booking facilities.
  • Marketing the business via numerous traditional and digital means.
  • Hiring skilled employees and paying their wages in the first few months of your business.

These are just a few aspects out of many, which can be met by paying for a travel agency loan from a reputed bank.

Documents Needed

Documents required to avail a quick business loan for a travel agency:

  • Aadhaar Card
  • Business registration proof
  • Address proof of firm or self 
  • PAN Card
  • Bank Statement of the previous six months. If the loan amount is over ₹15 lacs, you need the latest ITR.

Eligibility Criteria

Here you'd come to know what eligibility criteria you'll have to pass to set up a travel agency business:

  • Your minimum age should be 21.
  • The lender should be satisfied with your credit score. The advice is to have a minimum credit score of 700 before applying for the loan. 
  •  Before applying for the loan, you must have salaried professionals working for you for six months.
  • You must already be a customer of your chosen bank to avail pre-approved loans.
  • Most banks have given income criteria for loan applicants. Your monthly income should be satisfactory to the bank.

Types of Travel Agency Loans You Can Apply For

There is no deficiency of options for availing financing for businesses in today's time. There are so many lending institutions available around you. Here we give you an idea about which all types of business loans are available for your travel agency:

Term Loans

Numerous financial firms readily offer term business loans. You can very well tackle the obstacle of capital for setting up your travel agency if you avail of this type of loan. However, you will have to comply with a few pre-defined terms to avail of this type of loan.

Small Business Loans

Some banks offer specially designed loans that meet small businesses' demands. These loans don't impose any firm eligibility criteria or other tough conditions. However, you can avail just limited funds from such loans. These types of loans prove to be beneficial only for very small-scale businesses.

Also Read: What are the Different Types of Loans in India?

Government Financing

Tourism Finance Corporation of India avails financing to entrepreneurs. It is the Indian government's set-up, promoting the growth and expansion of the nation's tour/travel sector. Here also, the eligibility criteria can be somewhat challenging.

Gold Loans

Gold loans have become popular in recent years. You, as an entrepreneur, can consider gold loans a great financing method to adopt as a travel company loan. It differs from other loans for travel options because this sort of loan isn't just easy to avail of and doesn't trouble you by imposing tough eligibility criteria. The whole process is very easy and quick, which is why gold loans are trending high and high with time. 


In the travel agency domain, competition isn't that high, and even if you start a well-planned small agency and work strategically, you can generate high income. Most importantly, you don't have to invest in inventories, too much infrastructure, etc. 

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Q: Can I choose the tenure for my travel agency loan?


Some banks let you choose the tenure, and the tenure period varies from bank to bank. The bank will understand your repayment capabilities and figure out a suitable tenure for you most of the time. If you're unsatisfied with that tenure, you are sometimes given a choice for the same. You can pay your loan early if you want, for which some banks charge a fee, while some don't.

Q: Are there any other ways of financing my travel agency except bank loans?


Yes,you can also arrange funding through a few other ways, including pre-sales, buying credits or assets, Engel investors, family/friends, venture capital, grants, etc.

Q: How long does one have to wait to avail the travel agency loan amount in the account?


Like majority business loans, the disbursement period also depends on the bank. In general, it's around 3-10 days.

Q: Do travel agencies come under MSME?


Yes,you can register your travel agency under MSME, and you need to register your business under the services sector for this registration.

Q: Can I take out a loan for travel?


Yes,besides establishing a travel agency, an individual can also avail of a loan for personal travelling, which falls under the personal loan category.

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