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.
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.
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.
Instead of a personal loan for travel, you could:
A Heritage Bank personal loan is flexible, with a range of choices to personalise your borrowing experience, such as:
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.
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.