3 steps to getting a personal loan for your holiday in Australia

couple used personal loan to go on australian holiday

It may seem like everyone is overseas, however, domestic travel is on the rise in the last 12 months with a 37% increase on spend reported by the Australian Government Tourism Research of Australia. 

Australia has a lot to offer in terms of holiday destinations, with Aussies looking to explore their country and its natural wonders. However, with the rising cost of living, putting away paychecks to save for a holiday can be increasingly difficult. That’s where a holiday loan might help you.

So why not just use a credit card? 
Well, currently on the Mozo database, the average secured personal loan interest rate is sitting at 8.85%, and the average unsecured personal loan rate is at 10.08%. Alternatively, the average credit card interest rate is 17.11%.

While a credit card may give you flexibility when it comes to the potential total cost of the trip, alow-rate personal loan may end up saving you money in the amount you pay back in interest.

How to find the right personal loan for your trip 

There’s plenty of options when it comes to finding the best personal loan for your Australian holiday. You want to look for one that suits financial needs and habits.

With that in mind, here are three simple steps you can take to help you find the right loan for you, and better your chances at getting approved.

Step 1: Crunch the numbers

There are two sets of numbers that need to be considered when it comes to planning a holiday and using a loan to fund it:

  • The cost of the holiday 
  • Your loan repayments 

First off, be realistic about how much you want your trip to cost you overall. Are you planning to hit the road in a caravan or is it more of a hotel hopping situation? Whichever the option, tally up the large and small costs you’ll likely hit along the way. This will give you a good idea of how much you need to borrow.

The second thing you need to factor into your budgeting is the loan repayments. This will be based on how much you decide to borrow, but you also need to weigh up things like loan terms and repayment frequency (weekly, fortnightly or monthly), as these will impact how much interest you pay over the life of the loan.

If you need an extra hand figuring out what your regular repayments might be on a particular loan, check out the Mozo Personal Loan Repayment Calculator.

Step 2: Consider what features you need

Once you have a rough idea of how much you are wanting to borrow (and can afford to pay off), you need to start digging a little deeper.

The first thing to think about is the interest rate on the loan. Fixed and variable rates offer different benefits, so consider the pros and cons of both to decide which one is right for you. Along with a competitive interest rate, you’ll want to consider if the personal loan features available on a particular product allow you to pay off your debt sooner or in a more flexible way. 

Snagging a loan with free extra repayments is handy because if you get a Christmas bonus from work or simply come into a little more money, you can put it towards your loan without being charged. Similarly, a redraw facility is also a good feature as it gives you the flexibility to redraw on your extra repayments in case you need to later down the track.

Step 3: Apply for your loan

Found a loan that ticks all the boxes? Now it’s time to apply.

Depending on your lender the process of application may be a little different, but generally speaking you’ll likely be able to apply online. 

There are also a few things that you’ll need to provide your lender with so they can assess your eligibility to take out a loan. Some of these things include: 

  • Credit history 
  • Bank statements 
  • Payslips 
  • Utility and other bills 
  • Personal Identification (Licence, Passport, Medicare etc).

EXPERT TIP: Avoid applying for multiple loans at once as each application will appear on your credit report and can be assessed by the financial institution you want to borrow from. 

Ready to start comparing holiday loans? Check out the killer options below or head to our personal loan comparison page for more!

Compare personal loans - last updated 31 May 2024

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
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* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

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