With a holiday loan, you can take your dream vacation at a time that suits you! Saving instead is always a great option but by then you might be too old to really enjoy the holiday of your dreams! Plus you might not be as free in a couple of years, by then you could be working full-time, studying full-time, or even have a couple of kids!
How To Get A Holiday Loan
A Holiday Loan is just a regular old personal loan. With these personal loans, you can spend the money you receive on anything you like. The only choice you have to make is whether or not to choose a variable rate loan or a fixed rate loan, how much you'd like to borrow, how long you want to have to repay the loan, and which bank to go with.
Variable vs. Fixed Holiday Loans
Choosing between variable and fixed isn't complicated. Variable means that the interest rate might go up or down. This change in interest rate could be based upon the Reserve Bank raising or lowering the cash rate, or could be based upon the bank’s internal assessment of market conditions. Whereas a fixed rate loan means that the rate you sign up for never changes for the life of the loan. Usually on variable loans you can make extra repayments and redraw on your loan, which means if you are in front on your payments you can take some out and use it. With a fixed loan this usually isn't allowed, however a fixed loan means you will always know how much your repayment will be every week.
The Length Of Your Holiday Loan
Personal loans have terms available from 1 year to 7 years. The longer you stretch it out, the lower the repayments will be, but the total amount you will pay will end up being larger, due to the added years of interest.
Also keep in mind you can't predict the future, so signing up to a long loan with high repayments may mean you will run into some trouble if you were to lose your job and be unable to make repayments (Although you can get loan insurance for this at an added cost).
This same principle applies in a different way, if you were to stretch it to the maximum 7 years so your repayments are smaller, then that might be good for you this year as you aren't earning as much as you will the following years. If this is what you think will be happening in your case, then you should stick with a variable loan, then when you start earning more next year, you can pay more off your loan and get rid of it quicker, thus saving yourself the added interest.
How Much To Borrow On Your Holiday Loan
If you are unsure as to how much your holiday will cost then a great idea is to go for a loan like Westpac's Flexi Loan. This loan approves you for the amount you would like, say $15,000 but does not deposit the cash into your account all at once and start charging you interest. Instead, it gives you access to all this money, and you can take out amounts as you need it and only pay back what you use! You can get up to $75,000! To see more about this Flexi Loan and apply for it now Click Here!
Alternatively, you can work out your budget before you go, and only limit yourself to the amount you want to borrow. The main costs you will have to budget for would be airfares, accommodation, tours and travel, food, plus extra cash for spending on gifts, shopping, entertainment.
Don't forget that you will need a way to access your money while overseas. Using your regular bank card or credit card might cost you a lot more than you think. Check your bank's fees and charges for more information.
Top Ten Holiday Destinations For Aussies
Where will you travel now you have your cash lined up and ready to go? Here is the latest list of the top ten places Australians visit.
- 1) Indonesia
- 2) New Zealand
- 3) The United States
- 4) The United Kingdom
- 5) Thailand
- 6) Fiji
- 7) Malyasia
- 8) Singapore
- 9) Hong Kong
- 10) China