Travel is expensive, but no so much when you can get holiday loans! Everyone needs a break once in a while, and travelling can provide a lovely opportunity for proper relaxation.
However, getaways like this can get very expensive, and it’s difficult to find the extra money to indulge in such a luxury. How can you afford it? There are loans for travel you can get, so let’s review some of the options that are available to you and see what choice suits you best.
Holiday Loans – The Best Option For Travel With No Money
How do they work?
The first question we need to explain here is how this type of loan actually works. It’s easy – a holiday loan is an unsecured loan you apply for as you would for any other kind of financing. Your application is reviewed, and, based on your credit score, it is accepted or not. You can easily apply online, by filling out a form and you receive the answer very quickly.
Depending on how good your rating is, you can get a bigger or smaller sum of money, with an interest rate that is more or less advantageous. Naturally, the better your score is, the more money you can borrow and the less you have to pay in interest.
After you agree on an amount, you will receive the money and pay it back in fixed instalments for the duration of your loan, until you’ve repaid the entire amount, including interest.
How much can you get?
The amount you can borrow depends on various factors, such as the lending company, your credit rating, etc. but you can expect the loans to hover somewhere around £7,500 on the lower end and £15,000 on the higher end. Do not go in expecting to get the maximum amount, though, no matter how good your score is. You are never guaranteed to get the best deal available, so be prepared to give in a little.
What is the repayment period?
While this is not a long-term loan by any means (unlike a mortgage, for example, which can extend over decades), this financing option does not require you to immediately repay the money, or do it in a lump sum. Repayment periods can be in the neighbourhood of 12 to 60 months (1 to 5 years), but that depends on how much you can afford to pay each month.
Pros and Cons
So it all sounds great so far, but let’s look at things objectively, to help you decide: what are the pros and cons of getting a loan for holiday?
- The fact that the loan is unsecured means that you do not need to put an asset up as collateral.
- You can repay in instalments, according to your affordability.
- Individuals with bad credit will not get a great deal or be accepted at all.
- The interest rate on travel loans is quite high.
Other Ways To Go On Holiday With No Money
But maybe a loan for holiday is not for you, and you are looking for a different option. What are the alternatives to holiday loans? There are quite a few options to choose from, actually, depending on your financial situation and your preferences. So if you don’t qualify for travel loans, don’t worry – you can still take that vacation you’ve been dreaming of, even without having money!
A secured loan may be your best bet if you don’t have the best credit rating in town, but do own some fairly valuable assets. That way, you can use them to secure your loan, which will grant you access to a higher loan amount and a lower interest amount, so the best of both worlds.
However, the risk with this financing option is that you may lose the asset if you fail to repay the loan, so you may want to weigh this one carefully before committing.
Guarantor loans are loans that are co-signed by another person in order to secure your loan. In simple terms, if you can’t repay the loan, your guarantor becomes responsible for repaying what you borrowed.
Of course, the problem with this one is that in order to get a guarantor loan, you first need to find someone who is willing to co-sign with you and act as the responsible party, should you default on your loan.
A payday loan can be an option worth pursuing, especially if you can afford to repay the money quickly, or if you have bad credit. Technically, a payday loan is offered until your next payday, but it has now evolved into a loan over several months that can be repaid in instalments.
The only issue is that you can expect the interest rate to be quite high on this sort of lending, because of the lack of security, particularly with bad credit. However, it’s good for when you need money relatively quickly.
The easiest way to go on vacation might be to just put it on your credit card. You’re not spending any tangible money, so you’re still technically going on holiday with no money. It works the same way any other expense on your card would, so you’re going to have to pay off the balance. If you can get a 0% interest card, you’re in luck – that means a cheaper loan. If you’re going abroad, however, the Office Of Fair Trading advises being mindful of possible fees you may incur as a result of your card use.