If you have a yen for holidays and all the fun it brings along – then you must be constantly looking for opportunities that may soothe your wanderlust. Whether it is a weekend getaway or a vacation that you take with your family every year, the cost of vacation is expensive. If you are an avid traveller who set their voyage every now and then, you must have some serious expertise in budgeting. Taking a vacation once a year is a common ritual for many families. Some of them plan months in advance and save accordingly to turn their dreams into reality. However, some of us do not have the privilege to save money around the year. We turn towards personal loans or credit cards when we are planning a holiday. But how to find the best holiday loan? What are the terms that you must consider while looking for a personal loan for a holiday? In this blog, we will help you with a few quick tips that may ease your process of finding the right financial product.
Quick Tips to Find the Best Holiday Loan
Whenever it comes to borrowing a loan, we become sceptical about taking a decision. And sometimes, we end up choosing a product that is not designed to meet our specific requirements. If you do not know your exact needs then it becomes challenging to find the right one. A lot of people end up borrowing in a debt cycle as they fail to repay the loan. It damages their credit score leaving a spot on their credit report. Lenders consider such profiles to be risky and sometimes, they completely turn down their personal loan application. Read these tips to make your loan-hunting process easier, and convenient.
Explore and Shop Around!
Time to drop a truth bomb. The financial market is loaded with loan providers who offer personal loans. How do you choose the right one? The answer is shop around. Consider this classic example – when you go to a shopping mall to buy yourself a pair of jeans, do you go to the store, pick the jeans and pay the bill? Or do you scan every shop in the shopping mall for a pair of jeans before purchasing the one that you like? Taking out a personal loan is an important financial decision. Therefore, invest some time and explore the internet to find offers from at least 4-5 lenders. Different lenders may charge different rates of interest for a specific amount of money. Comparing those offers will help you pick the one that has comparatively a lower rate of interest.
Don’t Just Check the Interest Rate
Every other lender will also present you with an APR (Annual Percentage Rate). Rather than comparing loan offers on the basis of interest rates only, you should compare them on the basis of the APR the loan provider is offering you. An Annual Percentage Rate is the overall cost of borrowing that includes interest, and any other associated costs and fees. It gives you a clear image of the figure that you need to pay each month towards the debt. An interest rate is a cost that you have to pay for borrowing the money and it doesn’t include the other charges. If you compare the offers considering the APR, it will be easier for you to make a monthly budget.
Know the Type of Interest Rate you’re Offered
Getting confused? We will clear your confusion. Relax and take a deep breath and exhale. There are two types of interest rate. (One) is a fixed rate of interest where the interest rate will be fixed throughout your loan tenure. (Second) is a variable rate of interest where the interest rate keeps on changing throughout the length of the loan. It may be high or it may become low. Always find a personal loan offer with a fixed rate of interest to be on the safer side. With a variable rate of interest, you may end up paying much more.
Read the Eligibility Criteria of the Lender
Each lender has its own lending criteria. Ensure to go through the Terms & Conditions of the lender before applying for the loan. Know whether you fit in or not prior to applying as this will protect your credit score from being damaged. Therefore, go through all the important information and get in touch with the lending company if you have any doubts.
Look for Soft Quotes
Never heard of it? Take a chill pill and let us explain. Whenever you apply for a loan, the lender conducts a credit check to know about your past relationship with credit. There are two types of credit checks – hard, and soft. Whenever a hard credit check is conducted on your profile, it leaves a footprint on your report and a few points are knocked off your credit score. That means a hard credit check lowers your credit score. While a soft credit check doesn’t leave any footprint and doesn’t impact your score. It is a formal review of your report that enables the lender to offer you the initial quotes. However, a lender has to conduct a hard credit check by law before the final approval of the loan application. There are many brokers who offer Personal Loans with Soft Credit Check. Explore and apply with them to protect your rating.
If you search diligently, you will find a lot of offers that may tempt you. Remember that borrowing money comes with a cost and that cost has to be repaid by you. You are legally and morally bounded to repay the debt to the lender. Therefore, borrow an amount that you can afford to repay so that your credit score is not at stake. If you fail to repay the loan, the lender may report it and then you may have to face legal consequences. If you are issued with a County Court Judgement (CCJ) then it will impact your borrowing journey for the next 6 years. Lenders will consider your profile to be “too risky” and will turn down your application altogether. Therefore, borrow responsibly and repay on time and in full.