Compare holiday loans
Looking for the best loan to finance a getaway? This guide will help you get there.
Most holidays aren’t booked more than a year in advance, which doesn’t give you a lot of time to save for one – let alone to save for the spending money you’ll need while you’re there, plus the other inevitable costs involved – like car hire, meals out and insurance, to name just a few. If you’re fed up of putting off that hard-earned break, then taking out a personal loan and just booking the holiday is a great way to make sure it actually happens.
So what’s the best way to go about it? How do you choose the right loan? Are there alternatives? This guide will cover-off all these questions and more, so that you can make an informed decision and start looking forward to your trip!
What is a holiday loan?
When lenders talk about a “holiday loan”, it’s essentially just a regular unsecured personal loan, that you could use to finance a holiday. Personal loans can be used for almost anything – in fact, lenders normally list just a small handful of things that you can’t use an unsecured personal loan for, and you wocn’t see “holiday” among them. With an unsecured personal loan you can get the funds you need now and repay it over an agreed term.
How do holiday loans work?
OK, so you’ve found the holiday you’re after – now you just need to sort out financing it.
Once you’ve compared lenders, chosen a loan and submitted an application, provided your application isn’t rejected you’ll then receive a loan offer. You’ll want to check through this offer carefully. Once you accept it, the lender will transfer funds to an account that you’re nominated, and you’re ready to book your holiday.
The not-so-exciting part – repaying the loan – comes next. Each month you’ll make a repayment which will consist of the interest you’ve accrued so far, plus a part of the capital (the original sum borrowed). Because unsecured personal loans are almost always “fixed-rate” products, the interest rate doesn’t change throughout the course of the loan, even if interest rates generally do start to rise (or fall). That means that your monthly instalments will remain the same, and you’ll know in advance exactly how much the loan is going to cost overall.
A lot of people like the rigidity that personal loans offer. While it can be hard to know in advance exactly how much you’ll spend on your trip (especially if you’re heading off for longer than a couple of weeks), at least you’ll know exactly how much your loan is going to cost, and when it’ll be cleared.
How should I compare holiday loans?
It’s easy to just focus on the rates of loans, and make no mistake: the APR is a good benchmark for comparison, but there are other factors to bear in mind. Here are some of the key things to look out for when you’re comparing loans:
Compare personal loans to fund your holiday
With no guarantor
With a guarantor
With a guarantor who is a homeowner
What about just paying for the holiday on a credit card?
There’s more than one way to finance a holiday. A personal loan is a popular option, but some people might simply “put it on plastic”. Is that a crazy choice? Not necessarily, but there’s advantages and disadvantages to both routes, and which of the two is better for you will depend on your individual circumstances. Here are some of the key considerations (this is not an exhaustive list):
Ultimately, a credit card could work out cheaper, however if you’re not disciplined about repayments and could be tempted to make additional purchases on the card in future, then you could easily end up paying more overall.
How you can apply for a holiday loan
Before you apply for an unsecured personal loan you should first compare your options using the table on this page. Once you’ve chosen a loan you can click “Go to Site”. Applying online is straightforward and normally takes around 15 minutes. Don’t forget that eligibility criteria vary between lenders, so make sure you meet the criteria before you apply.
Frequently asked questions
More guides on Finder
Limited company loans
See how to get a business loan as a limited company in the UK, and how much you can borrow.
Chain break finance
Learn everything you need to know about chain break finance – a type of bridging loan that stops you losing your dream home if the sale of your existing one falls through.
Fix and flip
Read our in-depth guide to fix and flip and how this type of property investment works, including the factors you need to consider, the risks to be aware of and how to finance it.
Commercial bridging loan
Everything you need to know about commercial bridging loans. We look at when they’re useful, how they work and what to be aware of before taking one out.
Hard money loans: Short-term finance in the UK
Learn everything you need to know about hard money loans – also known as bridging loans. Find out how they work, what they can be used for and their benefits and downsides.
100% bridging loans: How to get one
Read our in-depth guide to 100% bridging loans, including how bridging loans work, how to borrow 100% of the property’s value, how to get the best deal and the pros and cons.
Loans for small businesses affected by coronavirus
Learn about government support and alternative options for businesses needing finance to help deal with the impact of coronavirus.
Compare bridging loan rates for property development
Everything you need to know about the benefits of using a bridging loan to fund a property development project if you don’t have the cash already available.
Compare bridging loans to buy land
Find out if a bridging loan could be a good option versus other types of finance if you’re buying land.
We explain how probate loans can be a valuable tool for dealing with financial issues that can come up when dealing with someone’s estate.