Reasons to consider a travel loan

What is a travel loan?

A travel loan is a personal loan taken out for travel purposes. That could be to go on a holiday overseas or a trip around Australia. 

A travel loan is an unsecured personal loan. Personal loans for travel often have a higher interest rate then car loans. This is because you aren't purchasing an asset, such as a motor vehicle, that the loan can be secured against. 

Why use a personal loan for travel?

Using a personal loan for travel can be a way to jet-set off on your trip sooner. Usually, you will know if you are approved for personal loan within 1-2 weeks of applying. So, you may be able to make use of last-minute flight deals, or an opportunity to take annual leave from your job.

Depending on the length of your trip, you may need to start repayments while you are travelling. Most lenders offer weekly, fortnightly, or monthly repayments so you can choose what repayment time will suit your budget for while you travel.

When you arrive back from your travelling journey, if you find you have some spare cash, you could consider increasing your repayments to pay back your loan sooner. Keep in mind that not all lenders offer unlimited extra repayments, so it’s important to understand your loan terms and conditions before you sign on the dotted line.

What you need to know

Some types of travel may not be suitable for travel loan.  To get approved for a personal loan, you need to show a source of regular income, and meet other important lending criteria.  

So, let’s say you want to quit your 9 to 5 and travel around the world for a year. Sounds great! The downside is you will lose your stable employment in Australia so you would have to consider other ways of funding your trip.

A loan for travel will also have application fees, and interest charges. So, you’ll need to weigh up these costs against the benefits of going on your holiday sooner.

What are some other options?

Instead of a personal loan for travel, you could:

• Save up for your holiday using a high interest savings account. The interest payments can give you extra incentive to save.
• Consider a Credit Card. Credit cards have limits starting from $1,000 and may even include complimentary insurance. Credit cards may have higher interest rates when compared with personal loans, as well as additional fees and charges, such as annual fees.  
• Redraw from your existing mortgage or personal loan. This will only work if you have a loan redraw facility and have made payments in advance. Redrawing from your existing mortgage or personal loan may have an impact on your future loan repayments and/or your loan term. 

How does a Heritage Bank Personal Loan work?

A Heritage Bank personal loan is flexible, with a range of choices to personalise your borrowing experience, such as:

• Borrow from $5,000 to $50,000 depending on whether you fancy a getaway, or a grand adventure.  
• Choose a repayment term of one year to seven years, making it simple to pay your loan back on your terms.
• Weekly, fortnightly, or monthly repayments.
• Unlimited extra repayments and pay out at any time with no penalty.

The interest rate is fixed interest too. With a fixed rate interest, your repayments remain the same, so that you can understand your commitments for the time you choose to pay your loan back.

How do I apply?

Take a look at our helpful personal loan calculator to let you know how much you can borrow, and help you understand repayments.

Ready to take the next step? Quick start your application online today.