As summer approaches, it is inevitable to start thinking about summer holidays. Often the journey of dreams is considered too expensive and so we give up, without perhaps thinking that a holiday loan can be the best solution to leave thanks to a loan.
The holiday loans allow you to easily deal with all the expenses necessary to enjoy a trip or vacation, paying, in addition to travel and accommodation expenses, also any excursions, travel, services that are used during the holiday, purchases made on the spot and ancillary expenses, without having to justify in any way the expenses made to the lender.
The holiday loan can be applied to both banks and financial institutions and, in general, there is no need to be in possession of specific requirements, given the usually reduced amounts that are paid: it is necessary to show that you have a certain income and demonstrate the adequate financial reliability of the applicant, who undertakes to repay the debt in monthly installments over a period of time ranging from a few months to several years, depending on the availability and monthly income of the applicant.
Holiday loans: amount, duration and guarantees to be presented
Let’s start by saying that a holiday loan can cover up to 100 percent of the trip or holiday, with disbursed figures that vary depending on the bank or credit institution you request.
The amount granted for this type of personal loan is on average less than 10,000 euros, but in some cases it can even reach 30,000 euros, which can be repaid over a period of time ranging from 12 months up to 10 years through constant monthly payments or through the assignment of the fifth of the salary or pension. Thanks to this last solution, the holiday loan becomes accessible even to those who in the past had some financial problems or are registered on the bad payers list, since the installments are deducted directly from the salary or pension and therefore the risk of insolvency is practically nil.
The guarantees for access to a holiday loan are the same as for any other type of personal loan: a source of certain and stable income (paycheck, pension slip or income tax return) or the signature of a guarantor who testifies the financial reliability of the applicant and bear the debt in the event of the insolvency of the principal debtor.
Since the amount granted for a holiday loan is usually quite small, the approval, investigation and loan disbursement times are decidedly fast. The requested amount is paid in a single payment directly to the applicant’s current account, which can use it without lanes and without having to provide justifications.
Holiday loan: to whom request it
As mentioned above, the holiday loan can be requested from banks and financial institutions, and in this case the applicant is free to organize his holiday in total freedom, but can also be requested directly from the travel agency through which is booking the vacation of their dreams. In this case it is possible to take advantage of agreements stipulated by the travel agency or the tour operator with specialized financial, often obtaining a discount on the holiday itself thanks to the commission received by the agency on the intermediated loan.
Holiday loan: what the law says
The law establishes that in a holiday loan contract certain elements must be clearly explained, namely:
- the amount and methods of financing
- the guarantees required
- the interest rate charged
- the annual percentage rate (APR) and the conditions under which it may be amended
- the amount and the reason for the charges excluded from the calculation of the APR
- each price and condition applied, including higher charges in case of default
- number, maturity and amount of monthly installments
- any insurance coverage required
The law also guarantees the debtor the possibility of early repayment of the holiday loan in a single solution, saving the interest on the capital still due. In this case, in addition to the repayment of the residual capital, it may however have to pay a penalty that in any case must not exceed, by law, 1 percent of the capital financed. These details should be clearly stated in the contract signed with the issuing body, which should be read carefully before subscribing.