Sometimes your holiday fund may not be as big or stretch as far as you would have hoped. In this instance, some people may consider holiday loans. While this product may be useful to you, as a responsible lender, Personal Loans Now want to ensure you make the most out of your holiday loan.
What Is A Holiday Loan?
A holiday loan is a personal loan that you can take out to fund a holiday. It could be a great option if you need to pay for a holiday but don’t have the money available immediately. Holiday loans can be used to pay for holidays both domestic and abroad and are usually unsecured, which means they aren’t linked to any of your assets which could be used as collateral. Because of the nature of this funding type, holiday loans for bad credit aren’t always easy to obtain.
When Are Holiday Loans Really Necessary?
It is always advisable to spend only what you can afford to avoid having to repay debts. While it may be tempting to take out a holiday loan when you’re desperate for a holiday, you’ll still have the burden of having to pay it back, often for a long period after you’ve returned home. That said, there are situations in which a holiday loan could be of use – for example, a honeymoon, a wedding in a foreign country or even when a break is needed during times of ill health. They could also be used to cover unexpected costs for a holiday that has already been booked.
What Kind of Holiday Loan Should I Choose?
A cheap personal loan is often the best option when looking for holiday loans. Unsecured personal loans range from £1,000 to £25,000, and any higher amount than this usually needs to be secured against an asset, such as property. You should be aware that loans should only be used responsibly, so using one to fund luxurious holidays isn’t always advisable.
The higher the amount of money you borrow, the lower the interest rate becomes. You can find loan deals with interest rates of 5% or less for three-year loan terms, however, this does build up over time. With a personal loan, you can calculate the repayments over the number of years that suit your budget, and paying off debt as soon as possible means you will pay less interest overall.
How Can I Find the Cheapest Holiday Loans for Bad Credit?
Borrowing money at the best rates is essential and it is important to use comparison websites in order to avoid paying any more than you have to for your holiday loan. You will pay less money overall if the borrowing time frame is smaller, however with a personal loan, although you may pay more to borrow for up to 5 years, you can make the loan manageable with smaller amounts each month to avoid defaulting on the loan. Remember, low lending rates are usually only available for people who have great credit scores. Those who do not will pay more to borrow or be refused altogether, so taking out a holiday loan if you have bad credit isn’t always advisable. In some cases, the lenders will consider affordability over the credit history, but most will utilise these checks in a joint nature.
Things to Remember with Holiday Loans:
- Avoid taking out unsecured holiday loans by making an effort to stick to a budget wherever you can
- Sometimes a holiday is necessary, and money can be borrowed in the form of holiday loans
- An unsecured personal loan is usually from £1,000 to £25,000
- The repayment must be affordable and will dictate the loan term
- Borrowing for the shortest possible length of time will be cheaper
- The best-advertised loan rates are only for those who have perfect credit scores
How Can I Reduce the Amount of Holiday Loan Money That I Need?
Only take out holiday loans for bad credit if it’s absolutely necessary and make sure that you are not borrowing more than you really need, as missing a payment can have a negative impact on your financial standing. As an FCA regulated lender, we want to be sure we always work responsibly and offer consumers the best loan advice.
You Can Reduce Your Holiday Loan by Booking Early
You’ll need to borrow less money if you’re mindful about how and when you book your holiday. Airlines offer the cheapest seats first and the prices increase the nearer the date of travel. Keeping an eye on flight prices as much as a year in advance can save you big money on the price of the flights. Avoiding peak travelling times or holidaying during winter months can save a fortune for those who are able to do so. Renting a private property or doing a house swap could also enable you to visit your chosen destination for a fraction of the cost. If you plan to be out all day and are just looking for a warm, clean bed then you could consider using a hostel as opposed to a hotel.
Plan Ahead and Stick to a Budget
A good holiday budget will stop you from overspending and make your money stretch further. Planning is key: be sure not to forget anything as some replacement items are often a costly, unnecessary expense. However, be sure you don’t overpack as buying extra luggage space is expensive, especially on the day. Remember to purchase your currency in the UK to take with you to avoid paying high ATM fees for taking out money abroad. Also, remember to let your bank know that you are travelling as they could freeze your account if they become suspicious of activity abroad.
Are Holiday Loans the Best Option to Cover Your Holiday?
It is always better to purchase holidays that you can afford and pay for them with your own savings. However, there are times when borrowing is necessary. Taking a holiday loan to pay for a great deal by booking before you have saved up the cash could be a good idea if the savings were substantial. When looking at holiday loans for bad credit, remember that it’s cheaper to borrow money and repay it over a short timeframe, but a long-term loan may make repayments more affordable.
If you’re looking for a holiday loan, Personal Loans Now can help find the best product for you. As a lender and a broker, if we can’t fund your loan, we’ll try to find someone who can. Apply now!
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