Everyone would like to be able to switch off once from the everyday life. However, since a vacation is usually a rather expensive pleasure that not everyone can afford out of pocket at the first go, banks offer the so-called vacation loan. This works similarly to a normal loan, but obviously has a different purpose than, for example, a construction loan.
Start vacation loan comparison:
What exactly is a vacation loan?
With a vacation credit can be taken up exactly the same as with a credit for a car, a loan with a bank. Through this financial difficulties can be bridged, which have arisen, for example, due to unemployment or an unforeseeable loss of work due to illness. This type of "small loans" are usually available from a sum of 500€.
The loan will then cover the travel and accommodation costs. In some cases, there is also extra money left over to use for meals or activities. As a rule, it is not checked exactly for what purpose the loan was used in detail, so that when applying for the loan is not yet necessary to submit the completed travel plan.
Requirements for a loan
The requirements for a vacation loan, as well as the conditions and interest rates, vary from bank to bank. However, not all banks offer a vacation loan, as some consider it unnecessary or the risk too great.
Vacation loans are, among other things, also a popular marketing tool, as they convey to customers that it would be particularly easy to take out a loan in this bank in general. This also explains why the application procedure for a vacation loan is considerably simplified at most banks.
In principle, however, it is always important to make a comparison between the individual loan providers to get the best possible conditions. An important prerequisite for a successful application is also a regular income from an employed or self-employed job. Employment. Those who earn a lot get particularly good conditions.
Some banks, however, guarantee their customers loans despite a poor income. In this case (poor credit rating) it may be more difficult to find a low-cost provider, but by no means impossible.
Conditions and amount of the monthly repayment installment
The respective conditions of the leave financings depend on the different banks as well as the desired characteristics. In a credit comparison portal the ideal financings can be found at the most favorable conditions.
The monthly installment to be paid depends on the amount of the loan originally granted and the term of the loan. The longer the term, the lower the monthly payment. However, due to the interest rates, a higher final amount is to be expected overall than in the case of self-financing.
With a larger loan amount, the rates are usually significantly higher, as the risk for the banks increases depending on the size of the amount due to the possibility of insolvency. In addition, the creditworthiness determines the interest rate. A good credit rating therefore guarantees optimal interest conditions.
Example calculation – comparison creditworthiness independent and creditworthiness dependent
When calculating interest rates, banks basically decide between creditworthiness independence and creditworthiness dependence. The guidelines of each bank set this uniquely. Therefore, different interest rate calculations result for different banks.
Below are two examples:
Sum of the loan: 3000€
Term of the credit: 12 months
Effective annual interest rate: 5.35%
Monthly rate: 257,30€
Cost of credit: 87,60€
Effective annual interest rate: 5.35-10.8%
2/3 interest (two thirds of bank customers receive this creditworthiness-dependent credit rate): 7.89%
What different forms are there and what to consider?
There are two different types of vacation financing: on the one hand, the normal installment loan from a freely selected bank or from one's own bank, and on the other hand, vacation financing from a tour operator. Travel agencies in particular are interested in offering financing to their customers as a way to boost sales. However, you can very quickly fall into a trap here. Therefore it is advisable to compare the offers always quite exactly, since the financing over a travel agency is in most cases clearly more expensive and is not worthwhile itself therefore.
Depending on the type of trip, either a vacation loan with a shorter or longer term is recommended. In general, everyone should be interested in repaying the loan as quickly as possible, in order to maintain the opportunity for later loans. However, if you are going on a large trip, a loan with a longer term is advantageous, because then the monthly installments will not be too high. In addition, some banks offer a one-time repayment of the entire credit line.
Apart from the vacation credits, some travel companies also offer installment financing. Depending on the conditions, these can be a real alternative to the "small loan" and should therefore also be considered.
What are the possible pitfalls
Who would like to finance its vacation with a credit, should make itself before over the necessary framework thought, because otherwise the alleged dream vacation can develop fast to a disaster, if the money runs out at once.
In case of too tight calculation, it becomes difficult to enjoy the vacation to the full extent. On the other hand, it is not advisable to set the limit too high, because then the total amount will naturally increase and at the same time the total costs of the trip will significantly exceed the originally planned travel sum due to the interest.
What to do with bad credit / credit rating?
Vacation loans are also possible without Schufa, but in this case the choice is more limited. For example, there are intermediaries who refer customers to banks that offer vacation loans without any additional costs. The loan amount to be granted may be lower than with other vacation loans or the term may be longer. This ensures that even people with low credit ratings can get a loan for their vacation, which they pay off over a longer period than usual. This has both advantages and disadvantages (see point 9), which should be carefully considered before making a final decision.
General tips to consider
It should be noted that the terms usually end after twelve months. This pursues the objective of not having to pay off several vacation loans at the same time. In addition, it may be well worthwhile to cover only part of the travel costs through financing and to accumulate the other part early on through savings. Because so the rates are kept low and there is in the near future again the possibility of a vacation to start.
Advantages and disadvantages of a vacation loan
The advantages of taking out a loan to finance your next vacation are clear. Anyone who would like to take a break from stress, but does not have the necessary change, will be pleased to have the opportunity to start a well-deserved vacation despite a lack of financial resources.
However, it should be clearly pointed out that in this case the vacation is not completed with the return home, but only with the final repayment of the loan. This can cause stress in retrospect that you do not have otherwise.
In addition, it should be pointed out that in a vacation loan, unlike car financing, there is no tangible asset behind it. That means as soon as the vacation is over, the borrower has no more added value.
Current figures and interest rate developments
Currently, the loan interest rates are on a significant decline. Interest rates are at record lows, so taking out a vacation loan would be especially worthwhile now. The current low-interest phase on the German financial market can be explained by the good economic development.
It is particularly important to understand that loan interest rates hardly differ between different providers, as they are influenced by many factors. These factors include, for example, the market situation, the term, the amount and the credit rating.