Can I get a travel loan with bad credit?

Like other forms of personal loans, a good credit rating is not necessary, however increases your chance of approval and having a lower score will increase the interest rate the lender is willing to give you. This is because the lower credit scores are seen as riskier by lenders, but you may be able to improve your chances if you can offer a home or car as security - in which case it is important to ensure you can afford the repayments throughout the life of the loan. While there are some forms of unsecured bad credit finance , these will likely carry much higher costs than standard personal loans. If you have a poor credit rating, it might be better to delay your holiday plans and take some steps to improve your score before taking out a travel loan. This will put you in better standing for lower cost finance in the future. It may also give you time to put some savings aside for your holiday.

Are there restrictions on how I can use my travel loan?

With an unsecured personal loan, there are generally no restrictions as to how you can use the funds – as long as they are legitimate. When you apply for a loan, the lender will ask you to list how you will use the funds as part of the application process. If the loan is for a holiday, you would select "holiday" or "travel".

Can I start repaying my loan when I get home from my holiday?

Unfortunately, most personal loans require you to start making repayments right away. These are usually weekly, fortnightly or monthly, depending on your circumstances. This might be difficult for people who are planning on going on a longer-term trip, such as a year-long travel experience. Personal loan lenders usually determine your eligibility for a loan based on your income and your ability to repay. If you are hoping to go on a longer trip (and therefore potentially leave your current employment) it is essential that you have enough money saved to meet repayments as you travel. Calculate how much of your loan you will be expected to repay before you return to employment and ensure that enough money is set aside. It's also a good idea to set some extra money aside for extenuating circumstances, such as having more time out of employment than you expected when you return.