How do Holiday Loans Work?

While life can be really exhausting sometimes, a holiday is the perfect time to put your phone on silent and block out the rest of the world. Alas, nothing comes for free and it can be stressful trying to ensure you have enough funds for your escape from reality. This is where a holiday loan comes in handy. A holiday loan is a great way to afford the vacation you need without draining your savings account. But how do holiday loans work? And is it worthwhile for your situation?

Overview

• What is the purpose of a holiday loan?
• What can a holiday loan be used for?
• Pros and Cons of a Holiday Loan
• Are holiday loans worth it?
• What’s the difference between a personal loan and a holiday loan?
• Holiday loans with bad credit
• Other ways to finance the holiday
• FAQs

What is the purpose of a holiday loan?

A holiday loan is exactly what it sounds like, a type of personal loan to finance your holiday. The purpose of a holiday loan is to allow you to plan, budget and go on holiday without emptying the bank account in the process.

Oceania loan brokers will work to find the best holiday loan for you so you can spend less time worrying about money, and more time relaxing! Additionally, a holiday loan can boost your budget so you’ll have enough for all the payments required before and after the holiday.

What can a holiday loan be used for?

A holiday loan is specifically used for expenses that align with your holiday plans. The loan can support your holiday or fully finance the entire trip.

Uses for the holiday loan include:

• Travel insurance
• Accommodation
• Airfares
• Food and dining
• Car Rental
• Shopping and souvenirs
• Tours
• Prepaid Travel Card
• Emergency Funds
• Or the whole trip

Pros and Cons of a Holiday Loan

Like any other type of finance option, holiday loans have advantages and disadvantages:

Are holiday loans worth it?

Whether a holiday loan is worth it will depend on your individual circumstances and where you are in your holiday planning process. This loan can be used for the entire trip, or can be used as another step of security for yourself and others on the trip. Having the backup money in your account can give you peace of mind that you can afford the holiday, as well as any hidden or emergency costs.

However, depending on how early you apply for this loan may cause you to start the repayments while on your vacation. A holiday loan does offer a lot of flexibility but can also lead to higher rates and fees. Ultimately, whether or not you should take out a holiday loan is your decision.

If you are interested in a holiday loan but are unsure if it’s the right solution for you, talk to Oceania’s experienced loan brokers today! Our friendly team will guide you through the process and ensure we get the best rates and terms for your individual needs.

What’s the difference between a personal loan and a holiday loan?

Whether you should apply for a personal loan or a holiday loan will depend on your individual situation and what you need the funds for.The differences between these two loan options are specific to the purposes they are used for. Choosing a holiday loan is when the primary goal for the loan is to use for holiday payments only. This loan has a fixed interest rate and will need to be repaid in a fixed period of time.

On the other hand, personal loans can be used for multiple different reasons where there is no limit as to what the loan is used for, including using it on holiday. Personal loans do have a higher interest rate however, there is a higher flexibility in terms of repayments. The choice is ultimately yours to decide which loan is the best option for you.

Holiday loans with bad credit

With most loans, lenders require at least an average credit score to approve a loan application, and the better the credit score the more you can borrow. However, the amount you want to borrow and any other assets you already have will also determine your eligibility. Holiday loans can also negatively affect your credit score if repayments are not met which can make it harder for you when you already have a bad credit history.

Other ways to finance the holiday

If a holiday loan is not the best suited option for you, but you are still looking for ways to finance your trip, here are some to consider:

• Credit card
• Travel money card
• Line of credit
• Buy Now Pay Later

FAQs

Can I get a loan from the bank to travel?

Most banks and lenders have an option for a holiday loan; also known as a travel loan. It will depend on your situation, your research, and your preferences when deciding which lender to work with.

Can I get a small holiday loan?

Yes, you can get a small holiday loan. You can apply for the loan amount you require and use that amount as you wish for your holiday payments. You can use your holiday loan for certain parts of the holiday or for the whole holiday.