Aussies do love to travel. At our core we are a bunch of wanderlusts who work hard to plan and pay for our next great trip away. Some of the best memories from our childhoods are from family holidays, but with the cost of living rising they can be expensive to plan for. In fact months of saving can make it feel like you’ll never scrape enough together for your trip. That is when you might consider a holiday loan.
What exactly is a holiday loan?
Holidays come with a lot of expenses from the flights, accommodation, car hire, activities, meals out and more. If you’re heading overseas the total cost is even higher. A holiday loan (sometimes known as a travel loan) is a type of unsecured personal loan that might be able to help you manage your finances when travelling.
Holiday loans are designed to help cover the costs of your travel. Depending on how you plan to manage your funds, a holiday loan can help you pay for things like accommodation, airfares, tours and even travel accessories like luggage. For small and short-term funding, Fundo offers fast cash loans of up to $2,000.
How does a holiday loan work in Australia?
Holiday finance loans are a type of unsecured personal loan. They work exactly the same way that a personal loan does, which means that the amount of money you can borrow will depend on both the lender and your personal financial circumstances. When you get a holiday loan you will need to keep in mind that the length of the loan will ultimately determine how much you need to repay your lender every month. This could impact your travel plans if you will not be earning an income during your holiday or travels.
When you get holiday loans in Australia, once approved a lender will give you the money in one lump sum. Typically, your holiday loan would be deposited directly into your bank account to let you easily access funds to start planning your trip. Generally a holiday loan will come with a set repayment schedule throughout the life of the loan.
How do you repay a holiday loan?
As we mentioned above, you have a set repayment schedule for the duration of your loan. Each one of your repayments will go towards paying off the amount you borrowed, or the principal, and the interest. Depending on your preferences, you can pay manually or you can have our repayments automatically debited from your nominated bank account. You can also choose the frequency of each scheduled repayment throughout the life of the loan. It’s crucial to always have the funds available on the nominated repayment date to avoid accidentally missing a payment. Fundo offers a dashboard where you have self service options available to make extra payments, or reschedule when there is a change in your pay cycle or circumstances.
When would you get a holiday loan?
Saving money is not as easy as it sounds. Holidays can cost a fortune! It could take you a long time to achieve the holiday vacation that you have been dreaming about for a long time. Like anything in life, it’s often hard to factor in everything you might need during your trip. The unexpected is likely to happen and it’s always handy to have spare money to spend spontaneously.
What are some of the advantages of holiday finance loans?
The first would be the typically Fixed Interest Rate. Holiday loans in Australia generally have a fixed interest rate where the amount of your repayments stays the same throughout the loan. This can make it easier for you to factor your repayments into your monthly budget. It also gives you a clear structure for when your repayments are and for how long you will be making repayments.
Another advantage of a holiday loan with Fundo is that the funds are quick to hit your account. Once your application for a holiday loan is approved, Fundo can deposit the funds into your account within minutes. This is considered to be extremely fast compared to other loans. Fundo also offers no check loans to help you start your holiday planning faster.
Holiday loans are also quite flexible with their conditions. Unlike a credit card which would charge you with a cash advance fee—holiday loans don’t come with any hidden charges. The fixed interest rate lets you know upfront how much you will be repaying, and helps you spread out the total cost of your holiday across a number of loan repayments.
Holiday loans can help you fund your dream getaway
Australians spend an average of $77 each week on holidays. That amount adds up to around $4,000 annually. That’s a large amount of money no matter how much you earn. That’s where a holiday loan could be the ideal way to fund your trip so you can take a well-earned break when you want to. Did you just get the invite for a special destination wedding overseas? Wanting to finally visit family you haven’t seen for a few years? Don’t let budget constraints prevent you from creating travel plans.
Having funds available through holiday loans gives you the benefit of snapping up cheaper airfares or accommodation when they become available, rather than waiting until you have saved enough money. Getting savvy with flight sales and off-peak travel seasons can really save a lot of coin if you can nab them before the deal runs out.
I have a credit card. Why would I need to get a holiday loan?
Planning a holiday isn’t just about covering your airfares and accommodation. There are lots of different expenses you need to factor in to any trip. Honestly, it is easy to underestimate how much money you need for a holiday. Even with a strict budget to stick to, can you really resist splurging during holiday mode?
Although it is a good idea to budget your purchases, there is no guarantee that you will be able to stick to your original plan. Can you honestly say that you could go to Japan, Thailand or Korea without buying one too many souvenirs? Resisting the temptation is difficult, so do the right thing and try not to overshoot a holiday budget. Many people have a credit card for these situations, but all this does is create a new problem to deal with later down the track. Credit cards have notoriously high interest rates, which can prove very costly down the track if you are not able to repay the entire balance during the interest-free period, which is typically only 55 days. Your tan probably hasn’t even faded yet!
Holiday Loans are cheaper than credit card rates
The rates of holiday loans in Australia are typically lower than credit card rates. You can add a little extra to the loan that you will apply for so that you will have some wiggle room for any unplanned purchases. You can enjoy your vacation without stressing about expensive credit card repayments. Your small holiday loan can help cover those unplanned (and planned) expenses without blowing your budget.
6 ways to make the most of holiday loans
Before the holidays roll in you should already have a plan in hand. If you do not have any extra income in your budget from October to December, then you either use the money in your savings account or borrow the money from some source. Here are some tips to follow to make sure that you are taking advantage of your holiday loans and not the other way around:
1. Do your research and shop around.
You should shop around for the best holiday loan. Do not accept the first offer that you get. There might be a holiday loan somewhere in Australia that is better suited for your needs. You can look for loans in person or through the internet. You should know that when you apply for a loan, the lender or bank will base your APR on your credit rating. The better your credit rating is, the lower your interest rate. When looking for the right holiday loan, compare the interest rate, monthly payment amount, and the length of the loan. Fundo can provide loans to people with both good and bad credit. Speak to one of our friendly team today to chat about your eligibility.
2. Do not borrow more than what you need.
Earlier, we mentioned that you can underestimate your expenses. However, this does not mean that you should overestimate your budget on purpose. You should take out a holiday loan to cover your holiday trip expenses only. Prepare a detailed budget of what you might want to buy or experience on your trip, so you have an idea how much you need. You should also consider the monthly financial commitment you need to make to pay your loan back. If you feel like your income is not enough to meet that commitment, borrow less or make some budget cuts.
3. Don’t wait until the last minute to apply for a loan.
Some lenders approve loan applications within an hour, but others take a few days before getting back to you. Waiting until the last minute to get a holiday loan means that you might miss great airfare and accommodation discounts or having to shop last-minute for your trip. You are going on holiday so you can relax, so don’t put yourself in a position where you will get stressed before you even get there.
4. Be practical with your purchases and save the difference.
The longer you owe money, the more you pay in interest. That is how loan works. You can save some money by paying your loan off before it matures. You need to check the fine print of your agreement with the lender to ensure that your loan does not have a prepayment penalty. Be practical and try to spend less on each item you buy on your trip. You can save the difference from these purchases. You do not need to deny yourself of buying souvenirs—it’s just that you should look for affordable options.
5. Think before you buy.
It is easy to forget about your budget plans when you are in another country. There are many items overseas that you don’t get to see in Australia, and it is much harder to control your impulse to buy when you know that you are in a place for a limited time (FOMO anybody?). Take an extra minute to ask yourself ‘Do I really need this?’
6. Prepare a plan on how to pay off your loan.
You should know what you need to bring when you go on your dream holiday. All your essential travel documents should be in one place, and you should plan everything to make sure that you enjoy your vacation. However, you should also have a plan on how to pay off your debt after your holiday is finished.
You don’t need to deprive yourself, can take advantage of holiday loan offers in Australia so that you can plan your next getaway today. You should be responsible when it comes to handling your finances. Loans can help you achieve goals and open up opportunities if you handle them well.
FAQs
Can you get a loan to go on holiday?
Yes, you can get a holiday loan in Australia to cover your travel expenses.
How do I qualify for a holiday loan?
Qualifying for a loan depends on several factors such as your annual income, resident type, city of residence, working organization, debt-to-income ratio, and other such factors. To get approved for a Fundo loan you will need to meet our minimum requirements for lending. You must be at least 18 years old with an income of at least $500 a week from a part-time or full-time job. You can also have a pension or Centrelink payments on top of your other income.
How do I get help with my Fundo loan application?
Give us a call on 02 9066 9660 or send us an email to hello@fundo.com.au and our friendly customer service team will be more than happy to help answer any questions you may have and talk you through the process
I’m already a Fundo customer, do I have to apply for a new loan?
Yes, you will have to complete a new application for each instant payday loan you want funding for, so we can assess your current circumstances. For our returning customers we make this super easy — you can apply in just 3 clicks via your Fundo dashboard.
What disqualifies you from getting a loan?
The most common reason for disqualifying from getting a loan is bad credit history, low credit score or high debt-to-income ratio. Ensure that you educate yourself on financial wellness before applying for any type of credit product. However, at Fundo we understand that everyone needs help sometimes and that’s why we don’t just look at your credit score. We’re responsible lenders and we consider your income and spending patterns before we make a decision on your application. We believe we are the only lender in Australia that rewards our customers for showing outstanding financial behaviour.
How can I get approved for a holiday loan quickly?
If you maintain a good credit score, keep a good bank balance, have a good salary, and have all of the necessary documents ready before you apply, then you will be able to get the loan approved quickly. At Fundo we can often approve and deposit the funds into your account within the hour.
How do I apply for a holiday loan?
We’ve worked hard to make our application process as easy as possible. Once you have all your documents ready, applying online takes around 3 minutes and we can usually give you a decision quickly and even offer same day funding when you really need cash fast.
What are my repayments going to be?
In some cases, we will be able to offer what you are asking for on your application. Depending on your credit score and past repayment history, we may set preferable terms for your loan – for customers have a negative repayment history, we may add additional terms on your repayments to ensure you are financially able to meet your commitments.
What is the quickest Fundo loan to get approved for?
All of our loans at Fundo are have the same eligibility criteria for approval. As long as you meet the above eligibility criteria you stand a reasonable chance of being approved for a Fundo loan. Best of all, applications submitted during business hours will be processed on the same day.
Disclaimer: The opinions expressed in the Blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.