Best Ways to Borrow Money for a Holiday

All you need to know.

January, 2024

Are you dreaming of your summer holidays? Or maybe you are planning on putting a big holiday together later in the year when it gets colder in the UK, and you feel like a bit of winter sun abroad to cheer you up? Whether you are planning a long weekend or two away in a caravan in a UK seaside town, or you want to get away for longer to foreign climes, you need to think about how to pay for the holiday. Some people are lucky enough to have the ability and income to put money aside and save up for a holiday, for others it is a case of finding the right solution to borrow money for a holiday. There is no right or wrong answer, as long as you are careful, sensible, and know that you can pay back any holiday loan that you take out.

What do you need to borrow for?

The reasons behind borrowing money will differ from person to person, and when it comes to a holiday there are different components to consider. For instance, you might have enough money to cover the cost of transport, whether that’s bus, ferry, train, or flight to your destination, petrol for the car if you are driving somewhere in this country. For those who can afford the travel, they might require a little bit of help in paying for the accommodation.

For other people, borrowing money for a holiday might be for the spends that you’ll need to make sure you have a nice time away and that you’re not worrying too much about overspending and counting every penny (we all want to enjoy ourselves and take away the daily stress when we’re on holiday, don’t we?).

Borrowing for a holiday

You have a few different options when it comes to borrowing money to go on holiday.

Borrow from friends or family

If you are lucky enough to have friends or family members that are willing to help you out if you are short, with a small loan that can be used to pay off the entire holiday or parts of it; paying your travel costs for instance, then that is fantastic. In some cases, good employers might be willing to give you an advance, but we would advise against making this a regular occurrence.

Use a credit card

Using a credit card to pay for some or all of your holiday costs is an option, particularly if you are within a promotional interest phase with it. A long 0% APR period on your credit card or a new credit card could be enticing enough to use for your next holiday, as long as you pay it off before the large interest kicks in.

Buy now, pay later

Some travel agents operate a buy now, pay later policy with short-term fixed instalment payments on holidays booked directly through them. This can sometimes be completed without the need for an upfront credit check too, which makes it appealing to those with bad credit.

Lower your budget

Another option if you are struggling financially when booking a holiday is to look at ways in which you can reduce the overall budget. This might be achievable through choosing cheaper accommodation, travelling at times of the day where transportation is a lower price, having a lower budget for holiday gifts and excursions whilst you are on your trip.

Holiday loans

Other than that, there are holiday loans that are a fantastic way to take the pressure away and help you cover the costs of a holiday, as long as you can afford to make the repayments. This is a good option for those with bad credit and no savings, as there are some lenders out there willing to help out in these situations.

Holidaying with bad credit

The first thing to say is, you can go on holiday when you have bad credit and poor (or no) savings to fall back on and pay for it. There can be a lot of shame and stigma attached to having poor credit and debt, and this can lead to those who feel uncomfortable buying things and treating themselves from time to time. If you want to take a holiday this year, you have just as much right to do so as a person with a good credit score. It might be more difficult for you to pay for a holiday, but there are ways to do so, and as long as you are fiscally responsible and understand the limitations you have, you can go ahead and borrow money for a holiday and have the best time away. Holidays are there to get away from the stresses of daily life, and it should be no different if you have a bad credit score and borrowed money to go on holiday this year.

What is a holiday loan?

A holiday loan is a type of personal loan that you can take out with the idea to pay for a holiday. This can include enough money to pay for holiday expenses, travel, accommodation, gifts, and meals whilst you are away. Holiday loans are offered by banks and online lenders with a fixed interest rate and monthly repayments over a set loan term. This is the same as most repayment schedules over the course of six weeks to five years in most cases, whatever the reason behind the loan and credit application. There may be an upfront fee added to the cost of the loan by some lenders. If you have bad credit and apply for a holiday loan, there are certain lenders out there that are willing to help.

How does a holiday loan work?

In much the same way as any other type of personal loan, a holiday loan is most likely to be unsecured and will not require on any collateral to meet the qualifications of a lender, like you would for say, a mortgage application. Your income and credit score will have an impact on the amount that you can borrow, and the interest rates attached. This is where it is possible for a person with a bad credit score to still have the ability to borrow enough money to pay for the associated costs of a holiday, it just might be at a higher interest rate than if they had a good credit score.

What are the benefits of a holiday loan?

There are a few benefits to applying for a holiday loan, especially if you have bad credit and are worried about where to find the funds for your next trip away from home. In many cases, you can pre-qualify for a holiday loan without worrying about your credit being affected. Fixed monthly repayment terms and loan length also makes it easier for you to plan ahead and budget your repayment plan when taking out a holiday loan. On top of that, interest rates on holiday loans are more likely to be lower when compared with using a credit card to pay for your next holiday. You need to balance what is best for your current and future finances, and a holiday loan when compared to a credit card comes out favourably.

Of course, there are also some disadvantages to consider too, such as potential upfront fees loaded onto the loan repayment total, the fact you are increasing the amount of debt you have, and potentially higher rates of interest if you are applying for a holiday loan with an adverse credit history and bad credit score.

As you can see, there are a few ways in which you can borrow money for a holiday, with taking out a holiday loan one of the most popular and effective choices. This is especially the case for those with bad credit, but it is worth looking at as an option, as long as you know that you have the means to pay back the loan in a timely, consistent fashion.