Financing Your Holiday – Borrow Money

Norwegians travel all the time. Especially in the summer. For most Norwegians, summer means holiday, and often one or more foreign trips with the family or on their own. It’s basically just a problem that prevents us from traveling around the world, and of course it’s the money. If your holiday is approaching, you may have some concerns about how to fund it. Don’t worry! We help you. In this article we will give you some tips to make your holiday successful.

The best thing is of course to have money available on the account when that time comes. But if you have started a new job, you will not be paid holiday pay this year. It may also be that you have already used them for other urgent expenses, such as refurbishment of homes or car repairs.

Then there is an opportunity to take up a holiday loan. A holiday loan is suitable for both small and large holidays. However, this type of loan has a number of pitfalls that it is important to stay away from. Here you get the information you need to make a good choice for the personal economy.

What is a vacation loan?

In short, a vacation loan is a consumer loan that you raise to finance your vacation. Consumer loans are again a loan without collateral. This means that the lender does not pledge the property or other assets to approve the loan.

In order for you to get vacation loans, there are a number of things that must be in place:

  • You may not have any registered payment notes. There are few lenders who approve loans to people who have such a remark. In that case, there is talk of refinancing with a mortgage.
  • You must be of legal age if you wish to apply for a holiday loan. Many lenders have even higher age limits.
  • In order for your application to be considered, you must be registered in the Population Register.
  • Of course, you must have an income that is high enough to repay the loan. Many lenders report a minimum income, usually between NOK 120,000 and NOK 200,000 a year. But you are not guaranteed loans just because you earn more than the stated minimum income. It depends on an overall assessment of your finances.

You can today borrow up to NOK 500,000 without collateral. Of course, it keeps in long paths to finance a vacation. However, it is important to be aware of what financial commitment a holiday loan is before thanking you.

What does a holiday loan cost?

When a mortgage is not taken out on a loan this entails a greater risk for the lender. Then it is only income that remains as security for the loan. If you lose this, the likelihood is that you will not be able to service the loan. Because of this, there is therefore a high effective interest rate on unsecured loans. It is usually between 10% and 25%. Comparing with a home loan secured by the home, this is sky-high. The interest rate will also depend on how large the loan you raise. The rule of thumb here is that a larger loan entails a lower interest rate and the opposite. The total cost of the loan will also be affected by the length of the repayment period.

A consumer loan for vacation nevertheless falls less expensive than if you take it on the credit card with the same repayment period.

But it should of course be paid back. Preferably as soon as possible. You should have the ability to pay it down in three or four months. It’s boring if it’s still not gone when you vacation next year.

Tips for those who want to take a vacation loan:

  • Examine the vacation loan market carefully before borrowing. There is a sea of ​​consumer loan providers on the market today. Everyone wants to get you as a customer. You can therefore expect to be confronted with a number of tempting offers. These deals are not necessarily as good as they seem to be.
  • Before applying for a vacation loan, it is important to familiarize yourself with the market for unsecured loans. Find out what interest rates you can count on, as well as the flexibility offered by the different lenders.
  • It is important that you have a good plan for how to pay the holiday loan. You should set up a repayment plan in connection with startup.