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Taking Out Loans For Travel
If you want to go on holiday but cannot afford the large payment in one go, then you might want to think about taking out a loan for travel purposes. Many people never get to travel to the places they want because of a lack of current cash flow. However, more and more companies are offering loans specifically for travel and holidays. If you want to know more about these holiday loans, then here are some tips about taking out a loan for travel purposes.
What are the costs?
Travel loans are a form of personal unsecured loan, although you can also get secured travel loans in some circumstances. You can usually borrow between £1,000 and £25,000, depending on your circumstances and how much you need to borrow. The length of repayment is shorter than traditional unsecured loans, with typical terms being between 1 and 4 years. You pay back the loan monthly as you would any other loan. Interest rates are fairly competitive, and range between 7 and 10%.
Why use a travel loan?
There are many reasons why you might want to use a travel loan, even if you could afford the holiday with your savings. Many holidays require a large fee up-front in order to secure the booking, and this can be a strain on anyones finances. Getting a travel loan will allow you to pay for all the associated costs of the holiday whilst still having enough money to live right now. A travel loan can allow you to travel to the places you have always dreamed of going, but thought you would never go to because you couldnt save enough money at once.
Travel benefits
Another advantage of some travel loans is that they come with added travel benefits. Some loans include items such as free travel insurance or possible discounts on some holidays, depending on which lender you use. If these offers can help reduce the cost of your holiday, then it might be worth checking out the loan.
Who provides travel loans?
Travel loans can be got through your normal bank, or through travel agents who have teamed up with lenders to offer travel loans. There are a variety of loans available, and it pays to shop around to find the one with the best features and rates to suit your needs.
Why not a normal loan?
Getting a travel loan is slightly different to getting a regular unsecured loan, but is it better? Well, that depends on your circumstances and how much you need to borrow. Travel loans are dedicated to travel and holidays, and will help you get a better deal on your holiday. However, they have short loan terms, so if you want a longer term then you might want to go for a normal unsecured loan. In general, if you can afford to pay back the travel loan in the shorter term, then it will save you money and help you get the holiday you always wanted.
Unsecured loans: no need to burden your pleasures with unnecessary risk
The business of unsecured lending is gaining a strong foothold in the UK loan market. Instances of home repossessions are increasing at an alarming rate in UK. This is gradually shifting the tide in favour of unsecured loans.
Who would wish to lose his home while trying to meet the needs of life?
Nowadays, people in UK are quite apprehensive of pledging their homes to raise finances. They prefer to go for risk-free financial means to cater to their needs and desires. Unsecured loans are offered in the absence of collateral security. So, both the homeowners as well as the tenants are eligible for an unsecured loan. Unsecured form of personal loans not only reduces the risk for a borrower, but also offers freedom and flexibility in the usage of loan money.
However, lack of security poses a hindrance in the easy availability of unsecured loans. The risk factor is quite high in case of an unsecured form of a loan, as compared to secured loans. There is no collateral to back up the loan money. As a result, lenders run a risk of losing the money in case a borrower fails to repay the loan due to some reason.
The lenders counter the risk factor by imposing stringent terms and conditions, approving only a small sum of money and charging a comparatively higher rate of interest (as compared to secured loans).
You can avail a competitive deal of unsecured loans if you have an impressive credit score. So, get a report of your credit score from Experian or Equifax and bargain for a favourable deal.
Lenders also put emphasis on the employment stability of borrowers while approving an unsecured loan application. So, if you are employed, arrange documents that prove your employment stability.
Last but not the least, shop around as much as possible so that you can select the deal best suited to your needs. You can save your time and efforts substantially by doing online shopping for unsecured loans.