Travelling this summer? Maybe holiday with a personal loan

Whether it’s hitting the ski slopes in Switzerland or running along sandy beaches in the Maldives, your plans for the summer holiday will come down to your finances.

If you’re short on funds for the perfect getaway, have you considered getting a personal loan? 

You may not know it, but a personal loan can cover a range of travel expenses including flights, tour packages and even accommodation. 

So let’s get into some of the costs associated with travelling and how a personal loan can help with them, along with some common features that you’ll find with this type of loan.

Personal loan to cover travelling expenses

Here’s a breakdown of some travel costs for a two-week trip overseas during the summer:

• Accommodation: When booking accommodation, you can typically expect to fork out between $260 to $10,400 for 13 nights. The amount you’ll pay will depend on some factors, including the type of hotel you’ll be staying at.
• Flights. For a round-trip economy ticket, you may want to budget about $950 up to $4,200 if you’re travelling alone. Do note this cost can jump up if you’re planning to fly business class, where flights can start from $6,700 up to $11,700.
• Tour packages: While the cost of a tour package can vary based on a number of factors, including region, level of activity and duration, prices can range from $230 up to $16,307.
• Travel insurance: According to Mozo’s data, the average cost of travel insurance starts from about $90 to well over $1,000, depending on what you’ll need covered during your trip.

All up, you may need at least $1,530 to cover your travel expenses - excluding food and/or multi-city stops. 

As the total cost of going overseas can quickly add up, a personal loan could be a way to help you meet these expenses. Let’s explore some common features found in a personal loan.

Top of features of a personal loan

If you’re thinking about getting a personal loan, there are a couple things you may want to consider: how much you’d like to borrow, and how long you’d like to borrow the money for.

Generally speaking, lenders will offer loan sums ranging anywhere from $2,000 all the way up to $100,000. While it’s possible to receive approval for a high amount, borrowing extra isn’t recommended. Above all else, make sure you can handle the loan repayments based on your financial situation. 

To get a better sense of what’s do-able for you, crunch the numbers using Mozo’s budget calculator. This can help determine how much leftover money you’ll have to make repayments with.

Next, when looking at how long you can take on a loan for (commonly known as a loan term), providers tend to offer a repayment period between 1 to 7 years. This means you can make repayments over a shorter or longer period of time, based on your needs. 

Do keep in mind that having a longer term might mean you pay more interest over the course of the loan. In saying that, a longer term could also be more suitable if making smaller repayments are more manageable with your budget.

It’s important to consider your circumstances and what’ll work for you. Keep a lookout for high interest rates, and fees that could come with the loan when making your decision.

Compare personal loan options

Think a personal loan will help you reach your travel destination? Have a look at some of the best personal loans our money experts at Mozo have tracked this month or compare your top picks below!