“If we took a holiday. Took some time to celebrate. Just one day out of life. It would be so nice. Wise words indeed. Problem is, holidays can be expensive. Especially if you don’t own a magic carpet. A holiday loan could hold the answer.”
Holiday loans are an affordable way of getting that much-needed break when you haven’t had chance to save up. Many of the cheapest package holiday deals now appear online, but some companies require the holiday to be paid in full at the time of booking.
Taking out a loan to cover the cost of a holiday means you can flexibly spread the cost of going abroad, and still keep on top of your household finances.
How do they work?
Holiday loans are primarily taken in the form of an unsecured loan. This means you won’t have to provide any collateral for the loan, but a check will be made on your credit score. This will determine how much you can borrow and how much interest you’ll pay.
It is advisable to choose a fixed rate loan as the interest rates will remain the same throughout the whole repayment term. This will help you budget for the repayments.
Many people pay for their holiday on a credit card as it often provides insurance. This means that if the holiday company folds, you’ll get your money back. However, credit cards often charge much higher interest rates than holiday loans.
Getting the best deal
As well as shopping around when looking for a holiday to find the cheapest deals, we advise you do the same with your holiday loan. Money Guru’s comparison tables let you view all of our lenders in one place, making it faster to find the best deal.
With our Smart Search tool you can send just one application to multiple lenders, starting with the lowest APR. This ensures you get the best offers available to you.
Money Guru always advises that you make sure you can afford the repayments on a loan before taking one out. If you find yourself in debt and need some help and advice, please visit the following sites.
Updated on 20th July 2016