Taking out a loan for a holiday? Should you do that?
“You can do it. More and more Germans are also taking out a loan for a holiday trip. But you should think carefully about what form it takes,” says Nathan Behrendt from finanz-land.de
In principle, there is nothing wrong with a holiday on credit . The long-awaited trip around the world, the spontaneous city trip or the family holiday together is very important for many people.
If you don’t have the necessary change on your side, a holiday can also be financed by a loan.
“It is important that you choose the appropriate form of financing and also correctly estimate the necessary loan amount,” Nathan Behrendt continues.
The following forms of credit are suitable for financing a holiday in Germany: consumer loans, mini loans or interim financing via a credit card.
Forms of credit for holiday loans
Consumer credit
A consumer loan without a specific purpose is granted in Germany between 1,000 – 100,000 EUR .
In order to get such a loan, you need a sufficient credit rating and an income that is sufficient to service your existing expenses and the additional loan installment.
Suitable for:
– Higher amounts (usually 1,000 – 100,000 EUR)
– Financing with longer maturities (1-10 years)
Mini loans
Basically, a mini loan is nothing more than a consumer loan . However, a mini loan has a lower loan amount between 100 – 1,500 EUR and a shorter term (a few weeks or months).
Not many providers offer a loan of this amount. That’s why finanz-land.de has compiled a list of different mini loan providers .
Suitable for:
– Smaller amounts (usually 100 – 1,500 EUR)
– Financing with medium maturities (a few weeks to months)
Credit card
Financing a holiday through a credit card is very popular. Often, this is not even perceived as a possible “form of financing“.
In this case, the credit card company will pay you in advance. Some credit card companies give you the option of paying the amount borrowed interest-free within a period of 51 days .
An example of this is the TF Bank credit card, which includes free travel insurance .
Important: If you do not pay the outstanding amount of a credit card within the specified interest-free repayment period, there is a risk of high interest rates.
Suitable for:
– Smaller amounts
– Very short terms (if, for example, you have to bridge the time until a special payment)
In this blog post, we have summarized which credit cards are worthwhile for a holiday trip.
The loan amount
How much should the holiday on credit really cost?
Going into debt for a holiday in the long term must be a conscious decision. Especially when it comes to the amount you take out the loan.
Basically, the following applies: “If you are already taking out a loan, then it is better to include a safety buffer . Nobody likes to fly to a beautiful holiday destination and then can’t do anything on site due to a lack of financial resources.”
It is important to: The repayment rate must be affordable. It doesn’t do you any good if you have a great holiday, but then can’t repay your loan installments. Every loan is noted in a credit agency such as the credit bureau – even if you are late with your repayment installments.
This also means that you may find it more difficult to obtain a future loan or mortgage due to the entry.
Term of a holiday loan
Since loans for holidays are usually supposedly smaller loan amounts, the repayment period – if you want and can – is rather short.
In the case of consumer loans, banks usually offer a repayment period of 1-10 years. The term of mini loans is only a few weeks or months.
