A travel loan is simply a type of personal loan that’s used specifically for holiday-related expenses. Like other personal loans, it involves borrowing a fixed amount of money and repaying it over a set term, usually between one and seven years.

The loan is typically unsecured, meaning you don’t need to provide an asset like your car or house as security. Once approved, you receive a lump sum payment which can be used however you like, whether that’s to book flights, accommodation, pay for tours, buy travel insurance, or cover spending money while you’re away. The key advantage is flexibility. You set the loan amount based on your holiday budget and choose a repayment plan that fits your financial situation.

A travel loan can be a smart way to get your plans off the ground sooner, especially if you’re working within a set timeframe. Unlike saving for months, a personal loan gives you immediate access to funds so you can book flights and accommodation in advance, often securing better deals in the process.

The structured repayments mean you can budget with confidence. Instead of putting large sums on a credit card and dealing with high-interest debt, a personal loan gives you a clear repayment schedule and a set end date. Most travel loans also offer lower interest rates than credit cards, which helps reduce your total repayment over time.

Depending on the lender, you may be able to borrow a larger amount with a holiday loan, which gives you more breathing room to plan the trip you want. Whether it’s business class flights, a villa upgrade, or a once-in-a-lifetime tour, a holiday loan gives you the freedom to stretch your budget without dipping into your long-term savings.

Holiday loans are highly versatile and can be used to cover nearly any expense related to your trip. You might use your loan to pay for flights and accommodation, travel insurance, tours and activities, dining and entertainment, transportation or car hire, passports, visas, travel gear or even emergency funds or upgrades while abroad. For those planning destination weddings, honeymoons, or family reunions overseas, a travel loan can also help manage costs in the lead-up without relying on credit card debt or last-minute savings.

Applying for a holiday loan is much like applying for any unsecured personal loan. First, figure out your holiday budget and how much you’ll need to borrow. It’s a good idea to break down your expenses, flights, accommodation, tours, meals, insurance, and spending money, so you know what size loan to apply for.