Is there any such thing as a holiday loan?
Much like buying expensive equipment or replacing white goods, holidays can be a considerable expense in the average person’s life. For those that need a getaway, but simply can’t afford the up-front cost of an expensive vacation, holiday loans are the solution. This form of personal loan is taken out individually to pay for your upcoming trip, whether you plan to tour Europe, visit a beautiful tropical island or enjoy a theme park-based vacation.
If you’re considering travelling abroad or want to book in that once-in-a-lifetime vacation, then a holiday loan might be a good idea for you. Read on to find out more about holidays loans, from what they are to how you can apply for one:
What is a holiday loan?
Despite the specific name, a holiday loan is simply a personal loan with a different name. Unlike taking out a mortgage or financing a car, a holiday loan is not made against something. There’s no asset attached to your holiday, after all. This means holiday loans are a form of unsecured personal loan. While vacation or holiday loans are generally labelled as specifically for that purpose, they are actually more generic forms of credit. They offer similar or the same interest rates as other loans from the same lender.
As such, if you take out a holiday loan independently and don’t spend all the cash on your trip, you’ll still have some to take home with you. Some platforms offer holiday loans as part of their packages, in which case your loan will be in the exact amount of your package cost, with none left over for other use. Whichever option best suits you, these unsecured loans require the borrower to qualify for a personal loan under their specific terms and requirements.
How do I apply for a holiday loan?
Much like any other form of personal loan, applying for a holiday loan follows the same familiar process. Potential borrowers will need to provide information on their income and a form of ID, after which the lender will carry out a full credit check and qualifying process to check whether you’re eligible to borrow the specified amount of money.
Luckyloans.co.uk require an individual to be over the age of 18, and in most cases to have a UK bank account. In rare cases, simply having income above a specified threshold is enough to qualify for a holiday loan. There’s no one set way for your holiday loan application to be completed; it all depends on the specific lender and the requirements they set out.
Once your loan has been approved, you must then agree to the interest rate, fees, charges and loan term. Once this has been completed, you’ll receive instruction on when your holiday loan will reach you. In the case that these steps are all completed as part of a holiday package, a slightly different process may apply.
Am I limited to where I can travel to?
As mentioned above, a holiday loan is a personal loan. As such, there are no limitations on where you go or what you do with the money. Perhaps you’re planning a trip to a dream destination, or you’d simply like an extended holiday around the UK. There’s no wrong way to take a trip with a holiday loan, and there are no stringent requirements in place to prevent you from going to specific locations or doing particular things.
The one limitation that may prevent you from applying for a holiday loan is the fact that long-term travellers may have a hard time accessing this kind of personal finance. Because travelling for months or years means low or no income, this means that the lender is unable to decide based on a steady income to approve you for the loan. Beyond this specification, holiday loans offer complete freedom – the cash is yours to use as you’d like, provided you adhere to the requirements of the loan itself.
Setting your budget
Not all travel needs to cost a fortune, instead you can plan your trip on a smaller budget that doe snot require any other form of finance. Smaller trips usually consist of choosing a different type of hotel, making the most of local attractions and catering for yourself to save on food costs. For more information you can read our guide on how to travel on a budget.