Financial Feasibility of a Holiday Loan

As it approaches the time of year when everyone is looking forward to going on a holiday, advertisers blast ads all over from lenders offering a holiday loan.

After all, the lenders don't want anyone to miss out on a much-needed holiday for lack of money. It's the every-popular "buy now, pay later" scenario that has plagued us for the past several decades that captures our attention.

Determine how much you can afford

The first thing to decide is how much you can afford to spend on a holiday before you even consider a loan. That means not only the trip itself, but the payments that you have to make.

Certainly, a trip to Italy , Canary Islands , the French Riviera, and other exotic places sounds relaxing and romantic, but perhaps your budget only supports a week in the country or at the shore. You want to choose somewhere that is within your budget, so that even with a holiday loan, you can enjoy yourself and not worry how you are going to make the payments when you return.

Before choosing a destination, consider the following factors that calculate into the cost of your holiday:

Plane, train, bus, or cruise ship fare

Rental car

Hotel accommodations

Meals

Entertainment

Sightseeing

Child care expense for the places you can't take the children

The utilization of the above listing will change in light of where you plan to go on your holiday, but most of these will be a factor even if you choose a stay at a country inn.

Is a holiday loan right for you?

As an individual family, you must determine the financial consequences of borrowing money to go on a holiday trip. Certainly, you work all year and feel you deserve time away with your family, but the family budget may not support this luxury.

For the most part, if you have been unable to save any money toward your holiday fund, chances are good that you are not going to be able to make the payments on a holiday loan of any substantial amount, so you need to look at something closer to home like a trip to the country or the shore.

In addition, you want to think about taking a holiday loan that you can pay off in a year because otherwise, you will keep taking loans every year and will never be able to get out of debt or take the holiday you really want to take.

Exotic destinations

For those who have the financial means to take an exotic holiday with or without a holiday loan, have all of the plans made before you process the loan. By doing that, you know exactly how much money you need for the fixed price items such as transportation and accommodations, and you only need to determine how much you will need for extras such as meals, entertainment, and other items that cannot be planned so exactly.

Remember, a holiday loan should not replace setting money aside for a holiday, but it should be used as a subsidy when you don't have enough. If you get in the habit of doing that, you won't find yourself taking a holiday loan every year.

John Bowles writes general finance and loan articles for the UK Loans Only website at http://www.ukloansonly.co.uk

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