Loan for Holiday??????

getmore4less

One rule of thumb when borrowing money for a disposable/depreciating asset is to only borrow for as long as the time is before you need to do it again.

eg. if you go on holiday every year and borrow the money to do it it should be over a year max. (preferably less and you start saving to get out of the cycle).

Tixy

Lolla83 wrote: »

- I have a well paid job and so YES my partner and I can afford the repayments - over 8 years would be just under £200 a month which is less than I have paid in the past and managed just fine. I do not mind repaying over 8 years, however given my past track records, I have paid off loans early so it's unlikely it'll go to 8 years. I don't feel I need to go into more detail on how the finances for this will work, as it's not relevant to the question.

It sounds like you have already looked in to graduate loans in detail so you have probably already covered this point, but certainly the majority of banks have a 5year term as the maximum term for a graduate loan, I didn't know of any banks that go up to an 8 year term but perhaps your bank is the exception.

You mention a figure of just under £200 a month, sounds like you are basing the affordability on the assumption you would get the representative rate, from your bank and that your bank has lower rep APRs than many do for graduate loans (some of which have rep APRs around 10%). I'd suggest checking it would still be easily affordable at a few percentage points above the rep APR.

If you did find the max term was 5 years and the APR was say a still quite low APR of say 10% then the repayments would be well over £300 a month.
I'd think very carefully about that level of financial commitment for a 5 year period on something intangible and whether you are likely to have any change in circumstances that could mean you would struggle to afford it.

seasideme

Lolla83 wrote: »

Ok, for starters, I didn't think this forum was for personal insults - to the person who called me an idiot, take a look in the mirror. How dare you insult me when you do not know the full story!!!!

When I originally posted, it was a very quick post, not realising I had to go into so much personal detail to get a simple question answered. I genuinely do not know if banks assess their loan applications on the reason for spending - hence why I asked what I thought was a reasonable question. I was of the mind that loans were assessed on whether you could afford repayments - when I was told in passing that I might want to give a more important reason than a trip, it threw me. I know, I thought, I'll ask on MSE...how I regret that now.

SO, lets take this from a different angle - my question was, SHOULD I use a different reason other than "holiday" when applying for the loan? Acceptable and polite answers would have been "No, it doesn't matter what you put"...."No, don't do that as it's committing fraud"....or even, "Yes, they accept loans for traveling" etc etc. Not, getting personal and giving your opinion on whether my going away is a stupid idea or whatever, that's not what I asked.

Given that you all want so much personal information to answer, what is essentially a Yes or No question, I shall elaborate.

- I have been graduated for 4 years now, graduate loans can be applied for up to 5 yrs after graduating.
- It's not a simple holiday (in hindsight, using the word 'Holiday' was clearly a mistake as you all automatically assumed it was a sit-off beach holiday just for me!?), it's a 7 week 'trip' involving 4 family members going to various locations in Asia and Australia.
- I have a well paid job and so YES my partner and I can afford the repayments - over 8 years would be just under £200 a month which is less than I have paid in the past and managed just fine. I do not mind repaying over 8 years, however given my past track records, I have paid off loans early so it's unlikely it'll go to 8 years. I don't feel I need to go into more detail on how the finances for this will work, as it's not relevant to the question.
- I will not be leaving anyone with debt (????!!!! where did I ever suggest I had a terminal illness?!?!!?!?) It's a family member with a degenerative condition that, is fine to go away now, but come another couple of years, might not even be able to get out of bed. Which is why we are cramming everything into one trip.
- The last comment about the debt collector made me laugh...I'm pretty sure I will not have a debt collector "hunting" me! There's a difference here with some fresh-out-of-uni/jobless young graduate grabbing a loan for a bit of a fun trip...and me, knowing I have a regular income to come back to thus certain of the ability to repay my debts. For the record, I went to Uni as a mature student so lets say I have a bit of life experience under my belt.

Anything I've missed? But really, filtering out all the rudeness, I've gathered that NO it's not a good idea to give an alternative reason as it's fraudulent. All I wanted to know. Thanks guys.

Are eith of the other 2 people paying anything towards it, is the £15k just you & your partners share?

Why a graduate loan? Just apply as a couple for a loan say it's for a holiday and see where it goes. Or does your partner not work?

meer53

If the trip is for 4 people, and the total cost is £15k, why is the OP borrowing the full amount ? Surely the others can contribute their share ?

jonesMUFCforever

IMO the most the banks will lend on a Graduate loan is £10k over a max of 5 years.

BrassicWoman

Holiday loans usually need to be repaid over 12 months, as next year, most people want another holiday.

adindas

Lolla83 wrote: »

- The last comment about the debt collector made me laugh...I'm pretty sure I will not have a debt collector "hunting" me! There's a difference here with some fresh-out-of-uni/jobless young graduate grabbing a loan for a bit of a fun trip...and me, knowing I have a regular income to come back to thus certain of the ability to repay my debts. For the record, I went to Uni as a mature student so lets say I have a bit of life experience under my belt.

Well, from your response here, it seems that you are lacking of common sense and wisdom. You will never know what will happen in eight years time. You will never know the company you work for suddenly went into administration, rationalization. You will never know if your highly paid partner suddenly pass away (God forbid). How many people already in permanent employment for a few decades suddenly lost their job ?? How many people have fallen into the debt trap ??

If it was a secure loan, for instance home improvement, etc it was entirely a different matter as at least people will have some assets to clear the debt.
You might not like the idea of the debt collector chasing around but this is one of the most visible option left when the borrowers failed to pay their debt.

Look at here one recent example:
https://forums.moneysavingexpert.com/discussion/comment/65927170#Comment_65927170

Lolla83 wrote: »

Hi all,

Just a quick question, if I wanted to get a loan (Graduate) for say £15k for a holiday, do they allow loans for holidays or should I tell them it's for something like getting married?

Thanks
Lauren

People who use their common sense and wisdom, will never ask the question like this in the first instance as it shows that they do not know the fundamental wisdom, the difference between telling the truth and lie.

People with common sense should know that they will never lie for a serious loan application like this. Also I do not think the MSE policy here to encourage people to get loan by deception.

dealer_wins

Can you imagine still paying £200 every month to this day, for a holiday you went on in 2006!!

Delree

Crazy idea no matter the circumstances. If op has a well paid job then surely she should use her savings for this trip.

BadBehaviour

You should tell the truth on the loan application.

Having to pay back a loan for years is not something I would want personally, as you never know what's going to happen - if you lose your job, you're gonna be sorry. You need to make sure you can cover the payments somehow even with no job for a while.

I see lots people on here seem to lose their job right after getting loans!