Here at QuidMarket, we offer short term loans which we would not recommend should be used as a holiday loan. Our loans are designed to be used in an emergency, and should only be used to make a payment that you cannot avoid. However, it is important for us to share a thorough scope of all the available loan types on the market to help you make an informed decision about which is best for you. On this page, we will be covering holiday loans, what could be classed as a holiday loan, and some alternatives. With this information, we can hopefully help you to make an educated choice when it comes to deciding if you should borrow money for your next trip away.
What Is A Holiday Loan?
Holiday loans are a form of unsecured personal loans that individuals can apply for to pay for a holiday. As they are typically unsecured, you will not need to risk any of your assets, such as your home or car. The amounts that you can usually apply for range between £1,000 to £25,000 depending on the lender. They typically have fixed interest rates, so the monthly instalments should not change, despite how long your term is. However, it is worth remembering that the more you apply for, the longer you may be repaying the loan back. You should always think carefully about taking out a holiday loan and decide whether the trip is necessary before applying. Furthermore, if you borrow over a period longer than 12 months, you may find yourself still paying for last year’s holiday when you may wish to travel again.
At QuidMarket, we provide loans up to £600 for terms between 3 to 6 months for new applicants. This means that our loans would not be suitable in place of holiday finance loans, but instead, should be used to cover short term financial issues or emergencies. Our loans are also based on affordability rather than solely on your credit history, so we can offer loans for bad credit. As long as you can supply evidence of your monthly income, essential spending, and any other financial commitments, your application will be considered.
Are Holidays Loans Different To Holiday Package Payment Plans?
In short, the answer to this question is yes, the two are different, and each are suited to different people. With a holiday loan, you will apply with a loans provider and pay back monthly instalments with interest. A holiday package payment plan is secured via a holiday provider or travel agent, and is similar to a holiday loan, as you will need to pay the holiday amount over a number of months, but usually with no interest. This is because you are not borrowing the money, but rather spreading out the large cost over a term that suits you. They typically offer a low deposit and at least 3 months to make the repayments.
Advantages Of Holidays Loans
There are several benefits to seeking holiday finance loans, the first being that you will be able to pay for a trip that you might not have been able to afford otherwise. However, taking out any form of credit is a serious financial commitment, and it would usually be cheaper for you to pay for a holiday out of savings.
Another advantage is that there is no restriction on what you use a holiday loan for. Once the money is in your bank account, a holiday loan provides you with the freedom to spend the money how you choose, whether you need it to pay for transport, hotels, travel money or travel insurance. This can be a more flexible solution than opting for a package holiday on a payment plan.
Holiday loans also allow applicants to make fixed payment rates within a term of their choice. Borrowers will know how much they have to pay each month and when it is due to come out of their account, giving them the opportunity to budget accordingly. Fixed repayments make it simple to budget for this type of loan and a shorter repayment term could result in a more affordable loan overall.
Disadvantages Of Holiday Loans
Holiday loans are often seen as an impulsive reason to borrow, but applicants may not be able to borrow as much money as they would have hoped, particularly if they have bad credit.
Loans of any kind are a calculated risk, so applicants need to ensure that they have fully understood their repayment plan to avoid affecting their credit score. If payments are made late or missed all together, a borrower’s credit rating can be damaged and hurt their chances of borrowing in the future. They should also shop around to try and find the best holiday loan deals before making a decision.
Alternatives To Holiday Finance Loans
If you have been looking for holiday loans to help fund your next trip, there are a few alternatives that you should consider before applying:
- Use Your Savings – the less you borrow, the better, so if you have a healthy savings account, you should consider using some of the cash to cover as much of the holiday as possible. If you don’t have enough to cover the majority, think about how long it would take for you to save for the holiday. It might not be as long as you think and it would be worth the wait.
- Use A Credit Card – many credit card providers offer 0% interest credit cards, which you could use as an interest-free loan to fund your holiday. Many of the interest-free periods end after 12 months, so as long as you repay within the time frame, no interest will be incurred.
- Personal Borrowing – if you have trusted friends or family members that are willing to help, it can be a good option. Make sure you write up your agreements and the term that you settle on to make it official.
- Apply For A Line Of Credit – a line of credit is similar to a credit card. You decide the amount of credit you would like to set the limit at, then you can spend up to this limit and repay by a due date. Typically, you will only pay interest on the money you spend, so if you do not spend anything in your line of credit, you won’t start paying interest.
If you have exhausted all other options, holiday finance loans can help you to have the holiday of your dreams. However, they should be approached with caution and careful consideration. If you need any more support, please use the Money Advice Service for free and impartial advice.
QuidMarket provide short term loans with terms of 3 to 6 months, which would not be suitable in place of holiday finance loans. Our loans are designed to help applicants cover emergency loan situations or temporary cash flow issues, so they should not be used for holidays. If you need more information on our loans, please contact us and our friendly team will be on hand to help.