October 19th, 2021 | Updated on June 28th, 2022
Going on a holiday means you travel and explore new places, eat delicious food, get acquainted with a new culture, and meet new people. Vacationing also provides health benefits like lowering stress by helping you get out of the rut.
Travel companies offer the best deals all the time to attract people. Imagine a day when you see a Travel Company is offering a great deal on your dream destination, but you don’t have enough savings for it. What are your options then? You can let go of the opportunity or consider holiday finance loans.
Here is some vital information on whether you should opt for holiday loans for your travel plans.
What Is A Holiday Finance Loan?
A holiday loan is like a personal or unsecured loan. People take these loans to finance their holidays.
The holiday finance loans amount can range from $2100 to $30,000, and it varies with banks. If you have a good credit score, the bank shall be happy to offer you a holiday finance loan.
The loan amount can be spent on transportation, hotel accommodation, rental cars, and other travel-related expenses. Here are the benefits of these loans.
Benefits Of Holiday Finance Loans
Fixed Monthly Payments- A holiday finance loan has fixed monthly payments. Instead of using a large chunk of your savings, you can take a holiday finance loan and budget the monthly costs to pay back the loan.
You Can Borrow More Than An Overdraft- As mentioned earlier, the holiday finance loan amount ranges between $2100 and $30,000. By opting for a vacation loan, you can get all the money required to finance your dream vacation.
Lower Interest Rates– the interest rate differs with banks. Several factors are considered by the bank while offering the best interest rate.
Most leading banks offer an interest rate of 4.99%, which is lower than other types of loans. If your credit score is good, you can shop around for vacation loans and select a bank that offers the best interest rate.
More Extended Repayment Periods- the loan repayment period ranges from 1 year to 5 years. You may choose longer repayment periods for more manageable repayment of loans.
If you want an extended repayment period, you can call the bank customer service and talk about your requirements. The bank may provide an amicable solution that works well for both parties; bank and borrower.
Money Goes Directly Into A Bank Account– When your vacation loan is approved, the money directly goes into your bank account. It means you can use the money to buy foreign currency, which adds convenience as you travel to a new land.
Zero Establishment Fee- When you take a vacation loan, you don’t have to pay any establishment fee to the bank.
An establishment fee refers to the amount you need to pay to the bank before the loan amount is deposited in your banking account. The establishment fee varies with the bank, and it also depends on factors like loan amount.
No Ongoing Fees– Vacation loans do not have any ongoing fees. It means there are no recurring or hidden charges. The bank, however, may charge a late fee if you miss payments.
No Early Payout Fee– If your budget permits, you can fully repay the loan early (ahead of schedule). The bank will not charge any early payout fee if you want to pay your balance early.
Paperless Process– applying for a vacation loan is relatively easy, and you don’t have to submit hard copies of your documents.
Most banks follow a paperless application process in which you have to upload required documents, which the banks will verify.
After successful verification of the documents, the bank will approve your vacation loan. The loan application process is divided into five steps:
- Decide the loan amount you need and use the repayment calculator on the bank’s website to determine the monthly repayment amount and interest rate.
- Apply online by filling the form and provide ID verification and upload your bank statements.
- The bank loan department will review your application and provide you with the outcome within one day.
- Once the loan is approved, the bank sends the loan contract through email. Read the loan contract, sign it and send it back to the bank.
- After receiving the signed loan contract, the bank will deposit the loan amount in your bank account within one day.
To sum up, the thought of going on a dream vacation is exciting, because of which you should not let a shortage of funds become an obstacle in you taking some time off to enjoy life.
A holiday finance loan is an excellent option to realise your desire to explore the world as you can always pay the loan comfortably with proper budgeting.