Sometimes borrowing holiday money is not worth it – Holiday Loan
A loan for a summer holiday by the sea is sometimes not worth it. It can cost you up to 60% more than paying immediately.
Some unnecessary loans can cost you a lot. Summer is approaching and you may be planning on going on holiday this year. Maybe you want to have a nice holiday by the sea, but you don’t get the money. Vacation or hire purchase loans can be made in many places. However, such a holiday loan does not always pay off.
Loans for holidays by the sea
Almost every major travel agency will also offer you the option of financing through a consumer loan for your holiday by the sea. You can easily take two weeks by the sea in installments. Like everything, a holiday in installments will cost you something.
For a holiday loan (but this also applies to other similar consumer loans) it is common that you pay 20-58% (annual interest) for the money you borrow. This means that a holiday of 30 thousand crowns can also cost you 36 to 47.5 thousand crowns in annual repayment. And this is no longer a bargain price. It is up to you to consider whether you spend 14 days in the summer by the sea enough to pay 50% more
It is not worth borrowing for uselessness
Borrowing money for a new home or for reasonable expenses is always a risk, but it is certainly more sensible than borrowing for things you can forgive. Most debt problems, distraints or personal bankruptcies usually start just as people spend more money than they can afford.
It is probably impossible for most people to buy a new home without a mortgage or home loan. But with a mortgage you always have some value. Even if you overpay the mortgage by tens of percent, in the end you will remain a property (house or apartment), which still has some value.
If you take a vacation on a loan, you will not have anything left. The most beautiful memories. If you cannot afford to spend your holiday on your own savings, then you should think twice if you should not stay at home this year.
You can also borrow your vacation at the bank
If you still decide to finance your vacation with a loan, then it is better to first contact your bank. Banks commonly provide various non-purpose loans, which very often have better conditions than what they can offer you in a travel agency.
Keep in mind that when you take a holiday in installments at a travel agency, part of the loan commitment is taken by a travel agent and the other part is wanted by the lender. It may not always be true, but it is almost certain that such a loan will be much more expensive than if you take a regular loan from the bank.
The worst idea then is to buy a summer vacation in credit card installments. Credit cards have very high-interest rates, often 30% and sometimes more. It makes sense to make a credit card only for those expenses that you know you will pay during a free, interest-free period, or rather just small items. Credit cards (with some exceptions) are not suitable for larger issues.