Is it Right to Borrow Money for a Family Holiday?

Many people like to take their family away on holiday regularly. This can be a great opportunity to get to know each other better, be more relaxed and have a break from work , school and life in general. It can also be fun to do different things and explore new places. However, a lot of holidays cost lots of money and many families cannot afford to go on holiday unless they borrow the money. But is borrowing for a luxury like this something that should be done?

Look for alternatives

Before you borrow money for a holiday it is wise to see whether you have any alternatives. See whether you have any money in a savings account that you could use to pay for it, for example. Perhaps you have some money that you had forgotten about, you can sell something to make money or you can save up. If the holiday is not needed immediately, then you could save up some money each month so that you will not have to pay for it all in one go. It is worth calculating how much you can save each month and working out whether that will be enough to pay for the sort of holiday that you would like to have.

Keep it cheap

It is a good idea to keep the holiday as cheap as you can. If you can avoid borrowing by keeping it cheap this will be good, but even if you are borrowing, by keeping it cheap you will not have to borrow as much. There are different ways that you can keep the price down. Travelling off season always helps and even if you have to go in school holidays, going at half-term or Easter rather than the summer can be quite a lot cheaper. Also the type of place you decide to stay in will make a difference with hotels being more expensive than self-catering places and camping being cheaper than cottages. Think of the location too, with the further you have to travel the more expensive travel costs are likely to be. The form of transport that you use will also have an impact on the cost.

Is it worth borrowing?

You need to consider whether the benefits of the holiday outweigh the disadvantages of a loan. Think about the overall cost of the loan, how easy it will be to make the repayments each month and whether the debt will stress you out. Also consider the effect it might have on your credit rating and whether it pay prevent you from getting future loans that you might need more urgently. You will need to then think about what benefits you get from the holiday such as the family time and the relaxation. If you come back to worrying about debts it may be that the relaxation may soon be forgotten so you need to think carefully.

Find the best priced loan

If you do decide to borrow then do your best to keep the prices down by getting the best priced loan. Compare the different types of loans to see which looks like it will be the best one to suit your needs. Then compare the prices to get the one that will provide you with the best value for money. Note that the cheapest may not be the best, but you do not want to pay significantly more than you have to. Consider how large the repayments are, for example, and think about whether they will be manageable for you. Think about the length of the loan and whether you will be happy to be making repayments for that long. Also consider whether the lender is one that you will be happy to go with. You may be interested in a flexible loan that you will be able to repay early if you can. If so then you will need to look carefully to see whether the loan that you get has this option and whether this makes it more expensive. Look at any one off fees for repaying it early as well as comparing the interest rates.

There are a lot of things to consider but it is well worth taking some time to make a decision. This is an important decision and it could have a big impact on you in the short term as well as the long term. It is something that you should discuss with the family so that you make sure that everyone is happy with the decision. Ensure they all understand the consequences of the decision and the steps you can take to make the holiday more affordable, such as delaying it until you have saved it. It can be much easier making this decision with the agreement of others rather than having to do it by yourself.

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