Holiday Loans: Borrowing a personal loan to fund a holiday
We’re quickly progressing through the first part of the winter season, and many of us are already dreaming about the upcoming summer holidays. While the January blues are hitting with full force, why not give yourself something to look forward to? Embarking on your summer experience begins as soon as you start searching. So, instead of leaving it to the last minute, perhaps it is time to start planning your quick de-stressing getaway or the family fun adventure you’re looking for. For some people, holidays are the most exciting aspect of their year. After all, who doesn’t love time away from their usual routines? However, despite the holiday season being so popular, the experiences are not the easiest to afford. So, are holiday loans something that you can use to help, or something you should avoid at all costs?
What are holiday loans?
Holiday loans are a form of unsecured personal loans that you can use to fund your dream getaway. With the prices of holidays and weekends away constantly rising, we understand that the money can be hard to find all at once. Therefore, applying for a holiday loan allows you to borrow your desired loan amount and repay it over the course of a selected duration.
The Advantages of Holiday Loans
Despite being negatively portrayed, personal loans have many positives if used correctly. Here are some examples:
As everything is done online now, the approval of personal loans is faster than ever. Once you have applied for your loan, your request will be considered, and if you have been accepted, you could find the funds in your account on the same day. Therefore, if you want to get your dream holiday booked as soon as possible, you can.
Benefits To Your Credit Score
Our credit scores are extremely important throughout daily life, even more so than you may think. Therefore, taking care of it and ensuring everything is correct should be a priority. However, this is not always the case. When you lose track of your credit score, it can be difficult to find the right path again. If you’re considering borrowing a holiday loan, you could be building your credit score at the same time. If your repayments are successful, on time and paid in full, you will start to notice improvements in your credit score.
No Collateral Requirements
Personal loans, unlike many other loans of this size, do not require any form of collateral to be processed. In other words, you do not need to offer anything you own as an asset to be approved by the lender. As the lenders are not valuing your assets, you’ll find your whole process will be faster than most others.
The Disadvantages of Holiday Loans
Just like all credit products, if you borrow a personal loan you could potentially find yourself facing some disadvantages. These include:
Repayment periods tend to lengthen as the amounts range up to higher limits. Despite this helping with the stress and the management side of the payments, it does mean that the whole process is lasting longer. Therefore, it makes it more of a long-term commitment. For those with poorer money management skills, long term commitments can be difficult. If you end up making a mistake over the course of the loan, you could find yourself in further debt. If you have already embarked on your holiday loan journey and you’re struggling with any kind of payments, we suggest contacting your lender as soon as possible.
Personal loans are unsecured, meaning they do not need any collateral. However, as lending high amounts of money, especially to those with poor credit scores can be a risk to a lender, therefore, interest rates may be higher. Although, most of the time, the interest rates on these loans are much lower than those on any other kind of credit.
Borrowing a loan for a holiday isn’t always the best idea. After all, there are further risks involved in the process if something goes wrong. Therefore, it is always important to consider alternative options. It might feel like a lifetime since you last left the country for a holiday. However, borrowing a loan and rushing the process may not be the best answer for you as an individual. Some other ideas include using your savings, borrowing from those around you or even opting for a cheaper, more local holiday.