What is a holiday Loan?
Holidays loans can be a great way to finance your dream holiday if you don't want to use your savings. Perhaps you want to go on a family vacation or you're flying abroad to attend a family event, what ever the reason Money Monster searches every lender and bank in the Philippines to find the very best deals for personal loans, saving you more money for your holiday. At the moment most banks will lend from 10,000 pesos to 1.5 million pesos with the option to pay over 6 months to five years.
Why should i use a holiday loan?
It's often best to use your savings to pay for your holiday but if this is not suitable then a holiday loan is a good choice. They usually have a lower interest rates than other debt such as credit cards which means you will pay less interest. Some banks will allow you to have a payment holiday at the beginning of the loan agreement for 1-2 months and you can also structure your repayment over a fixed amount of time for example you want to borrow 200,000 pesos for 3 years, you will be given a fixed monthly payment making it easier to control your monthly budget. You want to set the loan term (how long you will borrow money for) at the minimum length of time possible so that you pay less interest, but don't be over confident with your repayments as the penalties can be expensive if you make late payment.
Disadvantages of a holiday loan?
As with all loans you will have a financial responsibility for some time, usually at least 6 months, this means you will be incurring interest for longer. Even though loans offer lower interest rates than credit cards, if you plan on repaying your debt within a few months then finding a 0% interest purchase credit card could be a cheaper option.