ONE LINE SUMMARY:
Looking for that ideal holiday but unsure how to pay for it?
THREE LINE SUMMARY:
Many people want to take a holiday but lack the finances to pay for it and the current time. Often the self-employed's income stream is inconsistent and a loan is the best way to finance in the sort term while keeping the cost affordable.
Holiday loans come in two basic formats: the secured and unsecured forms. Secured holiday loans are organised to be lent against some form of collateral which can be anything of value but is most likely to be the borrowers property. This affords the opportunity of a lower rate of interest, larger sums and and extended repayment period.
Unsecured loans can be organised without the necessity requirement of collateral , hence the benefit with this arrangement is that they can organised far more quickly by the lender – there is no need for collateral valuation for example. Also the borrower does not risk losing their home. The disadvantages to this arrangement are that there is a shorter repayment term, smaller amounts of money and higher interest rates .
By and large all UK residents over the age of 18 are eligible to apply for a loan but each application will be judged separately on individual circumstances and there is a limit on the amount that the person can borrow - £25000. To borrow more you’ll need to arrange a combination of loans, which can be problematic. That written it is unlikely that you would need more than £25,000 for a holiday unless you are looking at a top of range World Cruise.
Like any loans they should only be arranged if you can afford them – and also you should be looking at future eventualities. What would happen if, say, you were to lose your jobs? By and large the vast majority of people will take out a loan because they can afford it and they have a set purchase in mind – in this case a holiday.
For starters any borrower must check they are borrowing the absolute minimum – especially during the current credit crunch. There is no point in exposing yourself to more cost than necessary. The conscientious borrower should then hunt around the market for the best deal in town. Internet price comparison website are best for this but beware as they often display secured and unsecured loans in their results and the prospective borrowers can be mislead on cost as a result. As your personal bank are aware of your credit history it may well be worth contacting them as they may well offer you a loan when others may not and they will frequently offer a competitive loan rate as part of a promotion.
One last piece of information that is worthwhile for the borrower is that you should almost never organise repayment protection as it greatly adds to the cost. If you've done your homework you can now sit back by the pool and enjoy the fruits of your holiday loan.
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