Important to holiday loan
- Check requirements
Consider whether you absolutely need a holiday loan for your planned trip and how much realistic it must be. The higher the loan, the more interest costs are incurred.
- Determine possible amount and duration
Calculate with a budget listing which loan amount you can afford. Also, determine an appropriate, not too long runtime. Shorter terms reduce interest costs
- Compare and choose a favorable offer
Carry out a comparison of different providers and choose the offer that is best for you. A loan from a bank is almost always cheaper than the offers of tour operators.
An extended vacation provides relaxation and new energy, but is usually not very cheap. Who wants to treat himself to his dream trip without savings, can take a holiday loan. Thus, the required sum is available at short notice and will be repaid in installments only after the holiday. In order to find the right loan, a credit check is recommended as a first step.
But for whom is this form of holiday financing useful and what should you consider in the selection?
How to find the right holiday loan
Before you take out a holiday loan, you should consider whether such a travel financing is basically right for you. Some people can not enjoy a vacation if they are constantly aware that they have to take out a loan to repay it over a long period of time.
On the other hand, there are sometimes opportunities for travel, which are unlikely later: A multi-month trip around the world fits very well in the time between graduation and career entry, but can be much harder to realize once you are both on the job.
A romantic trip with the partner should perhaps be undertaken before the birth of the first child. And a honeymoon can not be postponed. It therefore becomes clear that not only financial considerations play a role in the decision for or against a travel loan.
Financing: term and loan amount
The term should correspond to the lifetime of the investment property. So you should ask yourself how long the recovery will last. Paying off a two-week holiday over two years does not make sense. In addition, there is a risk that during the loan term already the next major vacation is pending and you need to take out a new loan. A term of one year is realistic and in most cases recommended.
Banks usually set a maximum amount of credit based on the income of the borrower or the amount available each month for repayment and the chosen term. But you should also determine for yourself a maximum loan amount that fits your planned vacation and your repayment options. This may be less than what the bank would offer you.
The amount of credit required depends very much on your individual vacation plans. Here you should weigh how expensive your trip actually has to be. If you have a lifelong dream, you probably do not want to compromise. But on a regular holiday, it does matter whether you opt for a long flight or a holiday in Europe that can be just as relaxing. A cheaper holiday means lower interest costs and the loan is repaid faster.
Use a household bill to determine which loan amount you can realistically pay back. To estimate how much you can spend each month to repay the loan, you should list your income and expenses – or for households, those of your household.
But do not calculate too tightly by overestimating the possible repayment rate. Then you are not prepared for unforeseen expenses and, in the worst case, have to take out another loan. Ideally, the burden of the loan installment will be no more than one third of the amount available to you after deducting any fixed costs.
Saving tips for the holidays
If you take certain tips into account, you can save yourself some money. Thus, you can either keep the loan amount lower or have more money available for repayment afterwards.
Financedel has put together 10 saving tips for your holiday.
First and foremost, you should look for attractive offers that are particularly attractive: they should attract customers and often describe special conditions that are only granted to a few customers with particularly good credit ratings. Exactly this target group is probably not dependent on a travel loan.
It’s definitely worth comparing because interest rates can differ by several percentage points. If your own credit rating is not very good, you should opt for a non-credit account that offers the same interest to all customers. If your credit rating is good, credit-based credit may be the better option for you.
Unlike the mortgage lending or car loan, the holiday credit is not earmarked. It is a consumer credit that is freely usable. However, this also means that you have to expect higher interest rates because, unlike the loans mentioned, there is no certainty about their purpose. Because when you are back from vacation, the money is spent, whereas a car of the bank for a long time after the purchase serves as security.
Step by step to your holiday loan
- revenue and expenditure account
First, use the household bill to determine the amount you can spend each month on the repayment of the loan. Consider also unforeseen expenses such as a car repair or the purchase of a new washing machine. With the Financedel household calculator, a first budget bill can be carried out easily.
- Determination of the credit volume
If you know how much you can repay on a monthly basis, you will be able to match that with the need for your vacation. That way you can determine a realistic loan volume. Also, keep in mind that there will be additional costs on holiday beyond travel and accommodation. If it is financially possible for you, rather you calculate a little more money for food and activities, so you do not run out of money on vacation and you must skimp in the most beautiful time of the year.
- loan comparison
In the next step you should compare different providers to find the loan with the most favorable conditions. Consider all factors and do not be lured by offers that do not apply to you.
- loan application
If you have chosen a provider, complete the loan application. This is usually possible online. The application includes, among other things, your personal details and employment and monthly income. Often you also have to indicate whether there are negative entries to the person in the Private credit.
Since you need to prove your identity when signing up for a loan or when opening an account, for example, an identification procedure is required prior to disbursement. Most providers rely on the so-called post -ident procedure. With this service of Deutsche Post, you go with your ID card and a coupon of the bank to a post office, where the postal official confirms your identity and transmits it to the bank.
- loan disbursement
The amount will be transferred to your account within a few days. In some cases, a cash payment is possible.
questions and answers
For whom is the holiday loan suitable?
This form of travel financing is suitable for people who want to go on vacation, but just do not have the necessary money available. It is particularly worthwhile when it comes to travel, which makes sense especially at the current time, and if the prospect of a quick repayment exists. If you can foresee that you have to overdraw your account for the holidays and as a result high disparity would come to you, a holiday loan is usually the cheaper alternative.
Is a holiday loan justifiable? What considerations should one make?
The most important questions are whether you can enjoy the vacation with a loan and what your chances of a timely repayment are. If you only want to bridge a short-term bottleneck and be able to pay off the loan soon on your regular salary or due time deposit, hardly speaks against it.
Even with special trips such as the honeymoon, you can make an exception and make use of this holiday financing. However, if you are already repaying another loan and the prospect of having to take out a new loan for each coming vacation, you should think again.
What should be considered in the holiday loan?
Basically, it should be noted that the loan meets your needs and budget and offers favorable conditions. First, determine your needs and, when choosing an offer, pay particular attention to a sufficient but not exaggerated amount of credit, a reasonable term and favorable interest rates. The option of free special repayments can also help you to become debt free faster.
Why is a holiday loan worthwhile in comparison to offers from the organizer or to the credit card?
It is almost always more expensive to pay on installments with the tour operator. In this variant, the providers cooperate with the offer for banks and the interest rates can be in the double-digit percentage range. A holiday loan directly with a bank is therefore the cheaper alternative, especially in periods of low interest rates.
If you pay for the holiday by credit card, you run the risk that the cost of the trip will exceed your card limit. Then your reservations will go out and you will probably have to book at a later date for a more expensive price. It is even more annoying when you reach your limit in the middle of vacation and suddenly can not pay by credit card. Also check that your credit card charges are foreign and how high they are.
What is the holiday loan without Private credit? What should you pay attention to here?
In the case of a loan without Private credit, the lender does not ask for Private credit information from you and you can get a loan despite a bad Private credit score. Even so, your financial situation is being reviewed and there is still no guarantee that you will get the loan.
In this variant, however, it should be noted that there are also many dubious providers who exploit the situation of people who are dependent on a loan without Private credit because of payment difficulties in the past. In addition, the interest rates are usually higher, because the provider carries a higher risk by the lack of information.
What are alternatives to holiday credit?
Of course, if a loan did not make you feel good for the holidays, you can save in advance for the trip and put money aside every month. You may also soon have your time deposit due and you only have to postpone the holiday to use it. If this is not the case, always ask yourself whether a cheaper holiday for which you would not have to take out a loan would not be relaxing.