Travel loans

Holiday now and pay later with a travel loan

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.

What is a travel loan?

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.

Why do people take out travel loans?

There are many reasons you could want to take out a personal loan for travel:

• Holiday deals: You may be able to save money by taking advantage of a special offer that has a time limit attached.
• Emergency travel: If you need to visit friends or family with little notice, a loan can ensure you’re there when you’re needed most.
• Budget shortfall: When you’ve already booked your holiday but haven’t been able to save enough money before you depart, you might need extra funds to make your trip happen.

What should I look for when comparing travel loans

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:

No early pay-out fees and unlimited additional payments

Some lenders may charge penalties for paying down your loan. RACQ Bank personal loans can be repaid ahead of schedule at no extra charge.

Flexible repayment options

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.

Member discounts

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.

Is it better to take out a travel loan or get a credit card to fund a holiday?

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:

Interest-free periods

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.

Interest rates

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.

Cash advance charges

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.

Other common fees

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.

Want to know more about personal loans for travel?

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:

• Interest rates
• Fees
• Terms
• Limits
• Repayments
• Applying for a loan

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.