Aussies love to travel. So if you’ve been running the numbers on your next getaway and have decided you could use some extra funds, a travel loan could help you take off sooner and get more enjoyment out of your trip.
A travel loan is simply an unsecured personal loan that you intend to use to cover travel expenses such as flights, accommodation, and other holiday bookings. These loans have a variable interest rate, which means interest rates can increase or decrease based on a number of factors.
There are many reasons you could want to take out a personal loan for travel:
When looking for a personal loan for travel there are so many options to choose from that it can be hard to figure out which product will give you the best bang for your buck.
At RACQ Bank, we want to ensure our personal loans work for our members. That’s why we include features designed to make repaying our loans easier:
Some lenders may charge penalties for paying down your loan. RACQ Bank personal loans can be repaid ahead of schedule at no extra charge.
Personal loans give you a clear repayment timeframe, which makes it easier to budget for before and after your holiday. A great way to pay your personal loan off quickly is to set up weekly, fortnightly, or monthly repayments that come out of your account when you get paid. You’ll be able to relax more on your holiday knowing that your personal loan is scheduled to come out at the time that works best for you.
RACQ Bank Personal Loans come with RACQ membership, which will grant you discounts on accommodation, car rental, tickets, and holiday experiences. And the savings don’t stop when you get home. Take a look at our discounts page to see how RACQ membership perks could make your next getaway a little cheaper.
There are pros and cons to travel loans and credit cards, and the product that’s right for you will depend on your individual circumstances. A few things to consider include:
You will pay interest on your personal loan from the day the funds land in your account, whereas some credit cards don’t require you to pay any interest on your balance for an initial promotional period. While such interest-free offers can seem appealing, be aware of how much interest you’ll be charged once the promotional period is over, and make sure you have a realistic time frame for repayment. Once the interest-free period is up, interest rates tend to skyrocket. This is worrying, as it’s common for Aussies to take years to pay off their holiday credit cards.
The amount of interest you’ll pay on your travel loan or credit card will depend on the interest rate you get and the amount of time it takes you to repay your debt. Personal loans often have lower interest rates than credit cards and have a set timeframe that you must repay them within. A personal loan could be a good option if you aren’t confident that you’ll be able to repay a credit card within a set period.
It’s common for credit cards to charge you a few dollars for withdrawing cash overseas. These charges can really chip away at your holiday funds when you prefer to take out small amounts often instead of carrying around a lot of cash. A personal loan for travel is real money in your bank account, which means you won’t be charged for cash advances when you go to the ATM. Note: Most banks will charge you a separate fee for overseas ATM withdrawals, regardless of whether you use a credit card or take loan money out of your account.
Both credit cards and personal loans have fees other than those already mentioned. Credit cards often have annual/monthly fees, late payment fees, international transaction fees, over-the-limit fees, and direct debit dishonour fees. Personal loans can come with establishment/application fees and early/late repayment fees. When choosing the type of finance that’s right for your holiday, ask your lender to help you calculate the true cost of your funding.
For more information about getting a personal loan for your next holiday, head over to our personal loans page. There you’ll find out more about:
Or, if you’d prefer to talk to someone about getting a personal loan, you can speak to an RACQ Bank lending specialist by calling 13 1905. We’re here to answer your questions and get the process started.
Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, and consider if appropriate for you before deciding.
Except for RACQ Bank, any RACQ entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity’s obligations do not represent deposits or other liabilities of RACQ Bank. RACQ Bank does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.