If you’re jetting off on a long weekend, your honeymoon, or globetrotting, a loan can be a smart way to fund your travels.
Ideally, you’d use savings, but that’s not always possible. You may need to spread the cost over months or years. By borrowing what you can afford to repay, a holiday loan can be an affordable option.
A holiday loan can come in all shapes and sizes, but a guarantor holiday loan can be a useful, flexible option.
If you have the urge to travel or are presented with an exciting opportunity, a loan can often be approved quickly. Even if you have a poor credit history, this isn’t an issue for some loan options.
A holiday loan is often flexible with price and may, depending on the lender, cover over £5,000. Therefore, you could pay for your holiday costs as well as any spending money that you may need.
If you want to pay for a holiday, there are four major loan options available.
Personal loans are the high street option and most common. Unfortunately, if you have poor credit, they are unlikely to get approval. Also, your rating could suffer if you aren’t eligible for the loan due to a hard search being required.
Payday loans provide fast, short-term finance, making them a popular choice on the market. However, they often come with a very high APR. This could result in potentially large repayments.
Secured loans are often approved for most applicants as an asset, such as a property, is used as collateral. However, a failure to meet your payments on time will result in losing that asset. It is not an option to be taken lightly.
Guarantor loans are a popular choice for applicants with a poor credit score. It requires a guarantor to step in and make the loan payments if you fail to do so. It is a borrowing option based on the trust of family or friends.
A guarantor holiday loan could offer you the funds for a range of getaways to be repaid over time.
A personal loan may not be viable for securing the finance you need if you have poor credit. A guarantor loan, though, does not restrict you from a loan due to credit history.
Holidays can range from a weekend to months or a year of travelling. That makes this is a flexible loan option with fast approval.
This form of loan is beneficial if you’re younger with little or no credit history. Especially if you’re looking at going on a gap year.
There are specific ways that a holiday loan could help you improve your credit score and financial security.
By budgeting correctly, you should stay on track with your loan repayments, paying on time and in full. This responsible financial behaviour should improve your credit rating over time.
If you are in a position to repay your credit earlier, there will be less interest on the loan. By doing so, you will be in a stronger financial position. This means you can pay-off your debt sooner, improving your rating.
As a guarantor, there are a number of matters you should be aware of before a decision.
Holidays can range in their cost with add-ons, such as room upgrades or excursions, pushing up costs. Therefore, consider whether the borrower will meet their repayments. Otherwise, the payments will be on you.
It is also vital to know if you are financially secure enough to afford loan repayments. Also, consider whether covering any payments could damage your relationship with the borrower.