Written by A travel or holiday loan is a personal loan you can take out to help you fund various types of trips, from backpacking to cruises to honeymoons. It can be used for a range of costs, including:
- Flights
- Accommodation
- Visa and passport fees
- Wining and dining
- Transport
- Recreation
- Equipment
- Shopping
- Travel insurance
When it comes to finding the right loan, it's crucial to know where to look. Savvy's got you covered! With trusted partners around the country and a team of expert consultants, we're here to help you navigate the process and lock in the best available deal!
Why compare personal loans with Savvy?
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How can I compare travel loans?
Travel loan seekers are afforded a wealth of options when it comes to choosing a loan. Here are some of the key factors to consider:
The length of the loan
Your loan term goes a long way to dictating the amount you’ll pay for each instalment; basically, the longer the loan, the less money you’ll pay. Personal loans tend to be capped at seven years, with a minimum of one year, but this may differ slightly between lenders. It is also important to note that the longer the loan, the more interest and fees you’ll accrue, so shorter loans may be the way to go if you’re looking to avoid that.
Fixed or variable rate
Borrowers have the choice of going with fixed or variable interest rate holiday loans. Fixed rate loans maintain the same interest rate over the life of the loan, while variable rate loans are subject to fluctuation.
Interest and other fees
Interest rates are easy to compare between lenders, but it’s also important to note how much each different personal loan will set you back in terms of fees. Lenders will have different policies when it comes to the exact amount they’ll charge, but application, instalment, annual, early and late repayment and early termination will all typically come with a cost. Some lenders may not charge for all of these, particularly early or additional repayment fees, so you should check with lenders in advance to find out their policies.
Any bonuses offered
You may find that some loans will build in some extra sweeteners to draw you towards them, which might be worth considering. An example of this could be discounts on certain aspects of the holiday or insurance. It may not end up deciding which loan you choose to go with, but it can certainly influence it.
What other types of holiday finance are there?
If you’re going travelling and need some financial assistance, there are other options available beyond personal loans. You may also want to consider:
- Credit cards: credit cards can be used for travel instead of a loan for smaller amounts, with certain types of cards designed for travel on offer to holiday-goers. They can provide great flexibility and money on demand, as well as garnering frequent flyer points that can provide a discount on future flights. However, be aware that failing to pay off your outstanding amount within the credit card payment cycle will incur higher interest rates and fees. As such, they’re probably a more sensible option for smaller cash injections up to $2,000. Furthermore, users could also be hampered with a high cash advance rate or foreign exchange fees on a credit card if used overseas.
- Line of credit: a line of credit can also be a viable option for those looking for a smaller cash boost, as borrowers can withdraw funds as they need them to provide greater flexibility. A line of credit is a pre-defined amount of money that is accessible when required and able to be paid back immediately or over a length of time that you establish with your financial institution. They tend to carry a lower average annual percentage rate (APR) than credit cards but will still usually have a monthly fee regardless of whether you have drawn down on funds.
Top tips for planning your next holiday
The types of Personal Loans
Personal loan repayment calculator
It’s important to have an idea of what different loans might cost you overall before you apply. Fortunately, Savvy’s personal loan repayment calculator is simple to use and tells you everything you need to know about how much different offers might add up to overall based on a variety of different factors.
Apply for your personal loan online
Personal loan eligibility and documentation
Common questions about travel loans answered
Yes – applying for a joint personal loan with your partner is a great way to share your expenses. They can work especially well if you need access to a large amount, but your credit score is not strong enough to access this amount on its own.
Yes – we're partnered with flexible lenders who are ready and willing to work with people who've struggled with their credit score in the past. This will result in a lower borrowing capacity and higher interest rate, however.
If you’re yet to spend the money lent to you, you’ll typically be able to hand it back to the lender and cancel your loan.
Yes – because these are unsecured personal loans, you can use the funds you're approved for to pay for any type of cruise, local or overseas, as well as any other travel expenses you may need covered.
Yes – because it's a loan designed for personal use without any asset collateral attached, you can use it to fly or travel anywhere you like. As long as you can get tickets or are able to drive there, a personal loan can cover it.
Yes – as mentioned, because your loan isn't tied to the value of your holiday, you can take it out before you've settled on a destination or expenses if you wish.
This can be a smart way of saving yourself money in the long run. The reality is that the less money you borrow, the less you’ll have to pay back in fees. In the long run, a shorter period of time paying interest on a loan could make a massive difference to your finances. It is important to not overreach financially in this respect; assess your finances and decide what setup works for you.
No – you can take out a personal loan without the need for a deposit.
