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

Summer’s looking a little different this year. And for many Aussies it means planning a holiday in their own backyard rather than jetsetting overseas. 

But with Christmas spending season around the corner and many wallets feeling tighter, covering the cost of an Australian trip may seem like a little more of a stretch. 

That’s where a personal loan might help you. 

“Using a personal loan to cover an Aussie adventure could be a great way for travellers to spread the cost of their trip,” Mozo Director, Kirsty Lamont said. 

“Unlike credit cards, personal loans offer a more structured repayment plan for borrowers with weekly, fortnightly or monthly options. Not to mention, customers could snag a more competitive interest rate, with some personal loan offerings sitting below 5%”

So why not just use a credit card? 

Well, currently on the Mozo database, the average secured personal loan rate sits at 7.96% and the average unsecured personal loan rate is 10.26%. Alternatively, the average credit card rate is 16.35%. 

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

How to find the right personal loan for your trip 

There’s plenty of choice when it comes to finding a personal loan for your Australian holiday. 

But don’t settle for below par, you want to find the one that’s just right for you. 

With that in mind, here are three simple steps you can take to help you find what you’re looking for and better your chances at getting approved. 

Step 1: Crunch the numbers

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

• The cost of the holiday 
• Budgeting your 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. 

Speaking of borrowing, the second set of numbers that need to be crunched is the holiday loan itself. Not only do you need to consider how much you’ll have to borrow, also budget in your regular repayments. 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 extra 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. 

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!