How to get a loan to help you get to where you want to be.
Most holidays aren't booked more than a year in advance, which doesn't give you a lot of time to save for the ticket, accommodation expenses and spending money. An unsecured personal loan is one way you can get the funds you need now and repay it at a set term.
Find out how a personal loan works for holidays and if it will work for you. From fixed rate From comparison rate 100% confidential application A flexible personal loan from HSBC with a tailored interest rate between 9.5% p.a. and 15.99% p.a. based on your risk profile. Early and additional repayments allowed.
HSBC Personal Loan Offer
100% confidential application
A flexible personal loan from HSBC with a tailored interest rate between 9.5% p.a. and 15.99% p.a. based on your risk profile. Early and additional repayments allowed.
What products can I use as a holiday loan?
Compare holiday loans
- Harmoney Unsecured Personal Loan: 7.69% p.a. comparison rate. Get a competitive rate based on your credit score and borrow the funds you need for that holiday.
- Pepper Money Unsecured Personal Loan: 9.99% p.a. comparison rate. An unsecured personal loan with flexible repayment options and no monthly fees. Suitable for funding your holiday.
- SocietyOne Unsecured Personal Loan: 9.51% p.a. comparison rate. Lower rates for good credit borrowers. Suitable for use as a holiday loan.
- Latitude Personal Loans: 15.19% p.a. comparison rate. Borrow up to $50,000 with the Latitude Finance Services personal loan.
How do holiday loans work?
Holiday loans are simply unsecured personal loans that allow you to use the funds to finance a trip away. You can apply for a loan from $2,000 up to around $50,000 and have between one and seven years to repay. Interest is fixed or variable and is typically between 8-17% p.a.
Personal loans can either come as a term loan, where set loan terms apply, or as a line of credit, where you can draw down on your credit limit as and when you need. With a credit line the terms are ongoing and the repayments are flexible.
Some providers also offer products that are tailored to travel. You may be able to spread payments of a tour or travel package out over the few months before you leave or you could be given interest-free terms on a travel loan. Two examples of these types of programmes are TigerAir and zipMoney.
Are there restrictions on how I use holiday loan funds?
As the loan is unsecured there are no restrictions as to how you use the funds (as long as they are legitimate). When you apply for a holiday loan, a lender will ask you to list how you will use the funds, usually by selecting options from a drop-down menu. "Holiday" or "travel" is usually one of the options.
If you're applying for a loan from a travel loan provider, such as with holiday payment deferment programs or with interest-free terms, you will be required to use the funds for what is set out in the terms.
How can you compare loans for holidays?
- Fixed or variable interest rate. A fixed rate allows you to lock in a specific rate for the life of your loan, whereas a variable rate may fluctuate. However, you usually get fewer restrictions with a variable rate loan. For example, you can usually repay the loan early without penalty or make additional repayments throughout the loan term. Fixed rate loans are generally for up to five years whereas variable rate loans can be for as long as seven.
- Cost of repayments. When calculating the cost of your repayments you should take into account the interest rate you will be charged as well as any ongoing account-keeping fees, as these will contribute significantly to the cost of the loan. If you are able to afford higher repayments then this could reduce the amount of interest you pay over the life of your loan. Using a repayment calculator can also give you a good indication.
- Loan term. Personal loans are lent for a minimum of one year, but the maximum loan terms depend on the loan you choose. When you are deciding on the repayments you can afford you can adjust the loan terms to make the repayments more affordable.
- Additional features. Take a look at the features being offered by some lenders and decide if you want to take advantage of them. You can then weigh these features up against the cost of the loan to determine their value. Some banks offer cheaper travel insurance with their holiday loans as a package deal. It may be worth looking into this and comparing the costs with other insurance providers.
What should you consider before applying?
Before you apply for a holiday loan you should determine the cost of your repayments and decide whether they will be affordable for you. You should also ensure that the amount you're borrowing will be sufficient for your holidays and whether the loan terms will be manageable. Remember, as well, that you will likely have to make repayments while you are away, so make sure you budget for this.
How you can apply for a travel loan
To apply for an unsecured personal loan you should first compare your options using the table on this page. Once you have chosen a loan you can click "Go to Site". Eligibility criteria differ between lenders, so check you meet the criteria before you apply.
You will also need to provide certain information to apply. This may include personal details such as your name and address, financial details including your income, assets and debts and your employer's name and contact details.