Secured Holiday Loans – Take a Break from the Routine Life
Secured holiday loans make money available to borrowers who need it to go for a vacation trip but are lacking the funds to pay for their trip. Secured loans require an asset to be pledged with the lender in the event that the borrower is unable to repay the loan. Secured loans are usually offered at lower interest rates because of the security offered and this lower interest rate saves the borrower hundreds of dollars in interest depending on the size of the secured holiday loan. Many borrowers will do a lot of online research to find low interest rate deals for their secured holiday loans so that they can take a break from their daily routines.
Last Minute Holiday Plans
How many times have your friends said let’s just book a trip to an island and get away for awhile? You would love to go but just do not have the ready cash available to pay for the trip and really do not think you should go at this time. Many consumers also do not want to use a credit card to pay for their trip because they are afraid of the high interest that credit card companies typically charge.
Maybe it is a friend’s wedding that is being planned on one of the islands or one of those typical wedding destination places. You know you will have a lot of fun and would love to go with your friends and celebrate their wedding.
Whatever the holiday plan is, lack of money can sometimes prevent consumers from taking a break from the routine of life. If you had time to save for the vacation or the wedding trip, you might have been able to set enough time aside, but most of these vacations are last minute ideas and unless you have money planned for a trip, it can be pretty tough to decide to go. This is where secured holiday loans can help consumers enjoy themselves while at the same time ensuring that the interest they pay is going to be kept low.
How Do Secured Holiday Loans Work
Most people will apply for a personal loan that is not secured, with only their name and promise to repay the loan. They will have to demonstrate that they have a job that pays sufficient money to carry the cost of the loan, any other debt that they may have and their daily living expenses. Depending on their credit rating, clients will be offered a variety of interest rates that depend on the credit rating, the term of the loan and the prevailing bank rates, which at the time of writing are at historic lows. These loans typically carry a higher interest rate than secured loans do since they are perceived to carry more risk for the lender.
A secured loan has all of the same requirements plus one more. They require something of real value that can be placed as collateral as part of your promise to repay the loan. Typically this will be the equity in your home or perhaps a car. This allows the lender to sell your collateral or place a lien on it to recover his loan in the event that you do not repay the loan. Since there is perceived lower risk of a default (no one wants to lose their house), the interest rate charged is typically lower which saves the borrower a great deal of interest on the loan.
A personal secured loan can be used as a secured holiday loan. Many consumers, who just need to take a break from the routine of life, will take this approach and apply for a secured holiday loan. They may decide to take a one year term or less which means they must repay the loan using monthly payments within a year’s time. This can actually work out quite well from a timing perspective since you repay the loan in a year or less and then you are ready to apply for another secured holiday loan and take your next trip. With interest rates being so low at the present time, more and more people are taking this approach instead of cashing in their savings.
Other Approaches to Vacation Loans
If secured personal loans are not your preferred approach there are other alternatives to be considered. One method is to consistently save money each month for your vacation and place it in a savings account to be used to pay for a vacation that you are planning. This method works very well since you are setting money aside for your vacation and you do not need to borrow money which saves you the cost of interest on a borrowed vacation loan. At today’s interest levels, you may earn a couple of dollars in interest from the money in your savings account. The interest rates on savings accounts are so low that most people just ignore this and it does not factor into their decision making.
Many people use their credit cards to pay for their vacation to take a break from the routine of everyday life. In effect when they charge this large amount to their credit card, it becomes a loan that will take several months or more to repay. Whenever you run an unpaid balance on a credit card, the high interest rates that credit cards typically charge kicks in making your vacation that much more expensive. Many credit cards will charge 18% or higher and this amount of interest can really add up in a hurry.
The bottom line is whenever you go on a vacation, whether it is planned or not try to have some money set aside for the vacation or considers applying for a secured holiday loan to pay for your vacation if you do not have enough money saved. At least you will be paying a lower interest rate and you can structure your loan so that is repaid in one year or less, just in time to head off on the next vacation. A vacation is time to relax and recharge your batteries without the need to worry about how you are going to pay for your vacation or pay off that high credit card balance which we all know charges such high interest rates. This is one of the best ways to save money for your next vacation as well. Every dollar you save can be used for that next journey when you take a break from life’s everyday challenges.