Do you know that? Do you have a certain dream vacation in mind and when you look into the vacation cash register do your dreams collapse? However, this does not have to be the case!
With a holiday loan, it is possible to treat yourself to a holiday at least once in a while, which completely corresponds to your own wishes and ideas. Below we show you what exactly constitutes a holiday loan and how you can quickly find a suitable and affordable offer through our loan comparison!
What exactly is a vacation loan?
The term holiday loan sounds self-explanatory at first, because it is an installment loan that is used to finance a holiday trip. However, very few banks provide special vacation loans with earmarked funds. As a borrower, you normally use an installment loan with free use. Ultimately, the bank does not check whether you have used part of the money for other purposes.
Holiday loans therefore have the following main characteristics:
- No earmarking
- Travel expenses can be financed as needed (travel, accommodation, leisure budget)
- Large offer with good comparison options
What can a vacation loan be used for?
You can use a vacation loan for all costs related to your vacation. These include:
- Travel expenses (flight, car, boat, bus & train)
- Accommodation costs (hotel, pension, holiday apartment)
- Food expenses
- Budget for activities (sights, leisure sports courses, wellness)
- Shopping budget (specialties, special goods, souvenirs)
- Travel insurance costs
Why should I take out a vacation loan online?
A vacation loan is a very straightforward form of financing that in most cases does not require extensive advice. Thus, the only disadvantage of online loans does not apply in this case. Instead, you can benefit from a number of advantages:
- Significantly faster and uncomplicated processing (payment after a fully digital application, ideally after 24 hours)
- Lower interest rates (easy loan comparison, no high branch costs at online banks)
- Offers in the credit comparison can be sorted with suitable performance criteria
What needs to be considered when taking out a vacation loan?
If you are planning a vacation and you are interested in a vacation loan, you should first determine the need. This is the only way you can later determine the required loan amount. For this reason it is important that you have already determined your travel destination and a large part of your wishes.
The next step is to search for suitable offers. The following aspects are particularly important:
The most important decision criterion is the annual percentage rate
As with any loan, costs also play an important role in holiday financing. As a rule, loans only incur interest costs in the form of the effective interest rate. Even if your own vacation is certainly an important time, the expenses should ultimately be kept within limits. Fortunately, with our loan comparison you can easily find a financing that meets your needs and is as cheap as possible.
Free special repayments make the holiday loan even cheaper
A vacation lasts only a few weeks. However, you still have to pay off the travel loan afterwards. That is why the option of free repayments is more than valuable. If there is anything left of the holiday budget or you expect a larger payment after the holiday, you can quickly reduce the remaining debt through special repayment and thus save on interest costs. Even though many banks are already granting free special repayments today, there are still loans where this is not the case. If you see financial scope for an early partial repayment, such an option is definitely recommended.
Short terms are important for vacation loans
As long as it is not a “once-in-a-lifetime dream trip”, the holiday loan should be paid off relatively quickly. This is also important for cost reasons, because the longer the term, the longer you have to pay interest and the higher the total cost. For this reason, you should rely on a loan provider that also allows maturities of 12 months or less. After all, nobody wants to have to pay the interest from the previous year during the vacation time of next year.
Select interest offers that match your own credit rating
When looking for a loan, you almost inevitably come across loan offers with interest rates that are dependent on creditworthiness and those with interest that is independent of creditworthiness. The difference is that in the second case, all borrowers receive the same interest rate, provided they have a certain minimum credit rating (read more about credit rating here). In the case of interest rates dependent on creditworthiness, however, the interest rate varies depending on the classification of your individual credit rating as a borrower. You can recognize such loan offers by an interest margin.
So if you are more likely to have a small income or other creditworthiness restrictions, then credit-independent interest offers are often a good choice. Credit-related loan interest rates, on the other hand, can be worthwhile if your creditworthiness belongs to the top group (high income, no negative factors). In this case, such offers would be even cheaper.
Spend a great time with the right vacation loan!
The vacation planning is coming up and you need financial means to organize your own vacation time as you imagine? No problem, because installment loans without earmarking can now be used conveniently and flexibly for holiday financing. Tour operators now also offer financing, but they are much less flexible.
In addition, holiday loans can be checked very easily using our loan comparison, so that you can quickly find the cheapest possible offer. In addition, you can design your desired loan in such a way that it perfectly matches your personal requirements and wishes. Use these advantages and look forward to a great vacation!