To maintain our sanity in this busy world we live in, a holiday can be the perfect remedy to escape the chaos and unwind. Be it a best friend’s wedding in Europe, a relaxing honeymoon in Thailand, a luxury cruise or a backpacking adventure around South America…a travel loan can help turn your holiday dreams into a reality. So when the piggy bank isn’t quite full and you don’t have enough savings, a personal loan is a great way to finance that well-deserved holiday.
A travel loan can cover many parts of a holiday including; flights, accommodation, meals, car hire, travel insurance, spending money and more. Now learn more about travel loans by reading our guide below so you can be off exploring the world in no time!
There are two main options when choosing a holiday loan; you can take out a personal loan or go with a credit card. First you need to decide how much you need to borrow to make the holiday happen and that will help you choose which loan to go with. There is no right or wrong, so have a read below of the pros and cons of each to help you decide which option suits you and your financial situation best.
Read more about personal loans vs credit cards
There are ways to save money on a travel loan so be sure to shop around and consider the below features, so you get the best deal for your financial situation. Just think every cent saved on the holiday loan could get you another cocktail by the pool or even an extra night’s accommodation!
Before you get caught up in the hype and excitement of planning your getaway make sure you take the time to consider the following pointers before taking out a travel loan.
We may sound like a broken record but we can’t emphasise enough how important it is to do a budget before you take out a personal loan. The last thing you want to do is borrow more than you can afford in repayments. Use the Mozo budget calculator to get an idea of where your money goes and how much you have left over. This will assist you in calculating how much you can afford to pay off your loan each fortnight or month. Now you also know if you can head off for a month long holiday to Europe staying in five star accommodation, or maybe a two week trip to Bali fits your budget a little better!
Repayments are based on the full amount of the loan, related fees, the loan term and interest rates. When you set up the loan you will agree with the lender on when you make the repayments, this could be weekly, fortnightly, monthly or an agreed date. You can make the repayments via direct loan repayment, direct debit or phone banking. Remember you’re likely to make repayments on your travel loan while you’re away, so don’t forget to budget for this.
Get an idea of how much your repayments will be by plugging some numbers in the Mozo repayment calculator.
When you've picked the ‘winning’ loan, click on the blue 'go to site' button, this will take you to the provider's application website and you can apply for the loan from the comfort of your own home.
Here’s your checklist when it comes to applying a holiday loan:
#1 Check the expiry date on your cards before you leave
#2 Decide how you’re going to access the money you’ve borrowed when you’re away
#3 Pick up some local currency before you leave (not at the airport) so you don’t get caught out without cash when you arrive at your destination
#4 Don’t use numerous credit cards while you’re overseas, you’ll just rack up a heap in fees and interest. Stick with the credit card that will give you the cheapest rates on international withdrawals
#5 Let your bank know you are heading away, as they do become cautious about overseas credit and debt activity, you’d hate for your card to be cancelled when you’re abroad
#6 Before you leave, don’t forget to head over to the Mozo travel money section for more holiday money tips
Useful travel links