December 27, 2021
There are different purposes for borrowing money. It is one of the easiest ways among all the other financial sources that everyone is eager to get into debt. So, if you have planned a holiday and do not have enough money to complete that trip, it is better to borrow a particular loan, namely holiday debt.
If you want to know whether this particular loan is coming under a secured or unsecured loan, you need not worry as it is an unsecured loan.
As a result, there is no question of worrying about losing your valuable belongings. Instead of that, you can enjoy quality family time at your desired destination.
Moneylenders usually offer holiday loans without thinking much because the rate of getting back money is quite assured. Even there is no question of loan defaulter due to low rate of interest.
What is Holiday Loan?
One can cite various reasons to get a loan when he is borrowing money as personal debt. So, on that note, arranging for money due to completing the trip is the reason for borrowing a holiday loan.
Moneylenders are ready to offer financial help to borrowers who have already planned for a trip but are unable to leave for the destination because of a lack of funds.
However, you must remember that there is a limit to borrowing money through a holiday loan. The only reason behind setting such a limitation is to remind people to stay within the limit while spending money on trips. A moneylender usually offers a holiday loan minimum of €500 to a maximum of €5000.
By analyzing the expense of the short trip minimum amount of money has been decided. On the other hand, if you are planning 2 nights and 3 days in a foreign country, then the maximum amount is also perfect.
Features of Holiday Loan
The features of holiday loans made it unique, and for this reason, most people always think about it while planning for a trip. Being a personal loan has earned much popularity, especially the maximum amount, which is also amazing which helps to complete even a foreign trip.
- No collateral damages
When it comes to this particular loan, there is no question of collateral damages. This is because money lenders do not want to keep any security deposit as a loan guarantor.
- Competitive interest rate
Although the interest rate will vary from one moneylender to another, if you borrow from direct lenders, the interest will remain low. A holiday loan is like a quick cash loan which the direct lenders of Ireland pay with no guarantor facility. Besides, the competitive rate of interest helps to survive the borrowers.
- Less credit score checking
The chances of rejecting loan applications because of low credit scores are completely impossible. Most money lenders do not check the credit score for lending such a low amount of money.
- Very low processing fees
Usually, a money lender may ask you to pay an extra amount as processing fees to process the loan. But mostly, a moneylender does not ask a borrower. Rather they adjust the charges through the total amount of debt. On that note, a borrower of a holiday loan needs not to pay high processing fees.
- Repayment tenure
Being a short-term loan, the repayment term also revolves around 1 year to 2 years. In this limited period, the borrower must repay the entire borrowed amount.
Pros & Cons of borrowing Holiday Loan
By reading the features, you may think that this particular loan has ample advantages. But actually, it has both some pros and cons. Let us know about them thoroughly.
- It comes as a pre-qualifier
If you hold a credit card, such a loan can come as a pre-qualifier. Usually, a credit card company also offers holiday loans to those cardholders who use their credit card more than others. As a pre-qualifier offer, you can apply for the fund at any time.
- Very low rate of interest
Basically, due to the low-interest rate, most people who do not have a sound amount of savings used to borrow holiday loans. It fulfils their wish of visiting the dream destination with family and at the same time need not pay huge interest rates.
- Fixed instalment every month
There is no question of different instalment amount when one borrows a holiday loan. Unlike personal loan borrowers, they can easily repay the entire money within a limited period of time. Every month they can pay a similar amount of instalments and easily get relieved from debt.
- Lenders may ask for upfront charges.
In general, a money lender will not ask for upfront charges, but being a personal loan, some money lenders may ask for this particular fee, which may increase the loan amount.
- Comparatively high rate of APR
Although the APR will remain low in most cases, many money lenders may ask for high APR from borrowers with low credit scores.
- Limited tenure
When you borrow such a short-term loan, you must pay off the debt within a very short tenure. If it seems difficult, apply for instant loans even as bad credit and repay the money. So, these are some pros and cons of borrowing a holiday loan. If you want to borrow such a loan, then analyze both of them.