A Guide To Holiday Loans For Travel
Got a holiday on the horizon? Whether you’re planning a country-hopping month abroad or a mini road trip for the weekend, taking a well-deserved break is good for your mental and physical health. But every holiday starts with plenty of saving and planning before you get to the fun parts, and it can be hard to relax when you’re stressed about money. That’s where a holiday loan could help.
Everyone deserves a chance to get away from it all every now and then. A small holiday loan can give you the opportunity to relax and unwind at a moment’s notice. They’re a way to get cash fast for spontaneous trips or get some extra funds to cover flights and accommodation, so you can focus on the fun stuff. In this guide, we’ll tell you everything you need to know about holiday loans, including how to apply and eligibility requirements, as well as some useful tips to help you save for a holiday.
The information in this guide is for general purposes and may not suit your personal circumstances. For tailored guidance, it’s best to speak with a qualified financial professional.
Overview
- What is a holiday loan?
- Why do people get travel loans?
- Loan amounts: how much can I borrow?
- Interest rates
- Application process
- How to budget for a holiday
- Travel tips for your next holiday
- Who is Swoosh Finance?
What is a holiday loan?
A holiday loan, or travel loan, is a type of personal loan that can make your dream adventure more achievable. It’s a way to get access to extra funds fast that you can use to cover any travel related expense. Rather than using up your savings paying for big expenses upfront, a holiday loan allows you to spread out the costs associated with travel with weekly, fortnightly, or monthly repayments over a period of time.
Brief history of personal loans
If you’re wondering how personal loans went from a way for farmers in ancient times to increase productivity to a way of financing your next holiday, you’re not alone. Personal loans have been around for a long time, but how we access them and the way we use them has changed a lot.
Personal loans in Australia used to involve applying in person at a bank, before waiting days or weeks for a decision, and then waiting even longer to access your funds. You also needed to have fair or good credit, as more reliance was placed on your credit history than your current financial situation. Financial reforms in the late 1980s and 1990s started to change things, opening the door to lenders who could offer credit options to everyday Aussies.
Things got even easier for borrowers in the 2010s as the boom of online lenders meant they could apply from anywhere on any device. Online applications meant personal loans could be approved and paid out within hours instead of days. Plus, the introduction of Comprehensive Credit Reporting (CCR) allowed lenders to take a more holistic view of a borrower’s finances and give people with a history of bad credit a fair go.
Today, everyday Aussies can get fast access to personal loans for a variety of reasons, including holidays, car repairs, and emergency bills.
Why do people get travel loans?
People get travel loans for a number of reasons. Even a small getaway can be expensive, and a holiday loan can help take some of the pressure off your savings account. Reasons someone might take out a holiday loan include:
- Boost your budget: maybe you’ve been hit by an emergency vet bill, or you just haven’t been able to save enough before your travel dates. A holiday loan can cover a budget shortfall so you don’t have to delay or cancel your trip.
- Securing a good deal: often travel agencies or other sites will offer flash sales or limited time deals on particular destinations. But there’s no telling when a great deal might come along, and you might not always be in a position to take advantage of it. With a holiday loan, you can secure the deal and even start paying it off before you leave!
- Short notice travel: not all travel can be planned in advance. Whether it’s a surprise wedding or an unexpected death in the family, sometimes we have to travel on short notice when you might not have the money available to do so. In these times, a holiday loan can help you when you need it most.
What can I use a holiday loan for?
You can use your holiday loan for any travel related expenses, including flights, accommodation, or travel insurance. It can also be used to buy meals and drinks while you’re away, as well as spending cash for that must-have souvenir.
What about using a credit card to pay for a holiday?
Another popular option to get some extra money for a holiday is to take out a credit card. Both of these options involve applications based on your credit history and current financial situation, and both will have a number of fees or interest payments associated with them.
For example, personal loans generally have lower interest rates than credit cards, as they come with a set timeframe that you must repay the loan in. This might make it easier for you to budget and plan around. On the other hand, some credit cards come with interest-free periods. Keep in mind that once the interest-free period ends, credit cards will generally charge a higher interest rate than most personal loans.
Another potential advantage of a personal loan is that you can start making repayments immediately, long before you even take off to your destination. That means that when you get home, you’ll have already made a dent in your debt.
Deciding which one is best for you depends on your unique circumstances, and it’s best to shop around and look at all the options before making a decision.
Loan amounts: how much can I borrow?
So how much can you borrow with a holiday loan? Well, like most things when it comes to credit, it really depends on a few factors. Every lender will have their own unique requirements and borrowing limits. Most holiday loans start at around $2000, but they can go up to $75,000. Your borrowing limit will be based on personal factors too, including your income, current financial situation, and credit history.
Here at Swoosh, we focus on smaller, more manageable holiday loans of up to $5000. That way, you can cover the big costs and focus more on the fun stuff.
Interest rates
One thing to pay attention to when securing a holiday loan is the interest rate. Rates will vary by loan type and lender, so it’s important to make sure you know what to expect. Holiday loan interest rates will either be fixed or variable:
- Fixed rate means you will have the same interest rate for the entire term of the loan
- Variable rate means your interest rates will change according to the market. So you could be paying a lower rate, then face a sudden upswing, and vice versa.
You’ll also want to keep an eye out for the comparison rate. Comparison rates take into account all of the fees and charges that come along with a loan to give you a more accurate idea of the costs involved. Before deciding on a holiday loan, it’s worth shopping around and comparing the interest rates of various lenders to find the best deal for your financial needs.
To keep things simple, Swoosh Finance offers fixed rates on all our loans. That way, your payments stay predictable, making it easier to budget and start enjoying your holiday sooner.
Application process
The application process for a holiday loan will vary depending on the lender you choose, the type of loan you apply for, and your own unique personal circumstances. Some might require you to submit an application in person, while other lenders like Swoosh allow you to do the whole process online. Below we’ve outlined the stages in a typical application process:
- Fill in basic details: online application forms will usually start by asking for some basic personal and financial details, including information related to your employment and income.
- Details of your asset (if loan is secured): if you’re securing the loan with an asset like a vehicle, you’ll have to provide proof of ownership, as well as other details like the make, and model.
- Further documents: in this step, you might be asked for ID, bank statements, or payslips to help lenders verify your identity and check whether you can afford repayments. Having this information ready before you apply can speed up the application process.
- Lender assessment: once you’ve provided all the requested information, lenders will review your application and come to a decision.
- Sign your offer: if approved, you’ll receive a loan agreement. Make sure you read through all the terms and conditions of your loan agreement carefully before you accept and sign.
- Receive funds: once you’ve accepted your offer, you’ll get your funds! Some lenders like Swoosh can have cash in your account on the same day you apply. Options like PayID can make the transfer almost instant.
Swoosh has simplified these steps into a simple three-step process you can do online from anywhere! Apply now to get the ball rolling.
Can I start repaying my loan after my holiday?
Most personal loans, including holiday and travel loans, will require you to start making repayments immediately. At Swoosh, we give you the flexibility to choose a repayment schedule that works for you and lines up with your pay, whether it’s weekly, fortnightly, or monthly.
How to budget for a holiday
Budgeting for a holiday takes some serious planning, especially if you’re travelling to a different climate that might require warmer clothes or different accessories than you’re used to at home. Here are some general tips to keep your savings on track:
1. Set a goal
Saving works best when you have a target in mind. Add up your flights, accommodation, and other expenses. Don’t forget to include daily expenses like meals, car hire, and any extra activities, as well as a buffer for some fun spending money.
2. Cut costs
Look for areas in your everyday life where you can cut back. Can you cook at home more and save the expensive takeaway nights for your holiday? Maybe there are some subscription services you’re not using you can cut to boost your budget. Even little changes like reducing your daily coffees from two to one can make a big difference over a period of time.
3. Stay motivated
Set milestones so you can track your progress and see your savings grow in real time! If you’re travelling with friends or family, encourage them to get involved and share your success together. You might even want to reward yourself with small treats along the way to keep your spirits up.
4. Keep track
It’s easy to switch off on holiday and lose track of what you’re spending. But a little awareness goes a long way. Keeping an eye on your costs while you travel can help you stay on budget and still enjoy every moment. And don’t stress — there are plenty of simple ways to manage your money while travelling so you can relax and have fun.
Travel tips for your next holiday
We’ve put together some handy tips to make planning your next holiday simple and stress-free:
- Research your destination
Looking into your destination before you go can save you time, stress, and money. From finding the best deals on flights and accommodation to discovering activities that suit your interests, a little planning goes a long way. If you’re still undecided, we can help you choose the right spot — whether it’s a budget-friendly escape, a Christmas break, or a great place for the kids. - Travel insurance
Getting travel insurance can be a smart idea, especially if you’re heading overseas. It gives peace of mind and protects you against illness, lost or damaged luggage, and cancellations. - Check official travel advice
For trips outside Australia, check the Smartraveller website for the latest advice from the Department of Foreign Affairs and Trade. This will help you stay prepared for your destination.
Who is Swoosh Finance?
At Swoosh, we don’t think a credit mistake in your past should stop you from taking a holiday today. We think your credit history should be just that – history. That’s why we’re helping people access fast and flexible financing. Our easy online application takes just minutes to complete, and our team of Australia-based assessors work hard to get same-day approvals.
With easy online applications, quick approval, and a commitment to responsible lending, we help you get the funds you need when you need them! Start packing and apply now for a holiday loan!
