Travel Loans

Looking to plan your next holiday but running low on savings? Find your low rate personal loan by comparing with Savvy.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on October 4th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Personal Loans Banner

Travel personal loans – what are they and how do they work?

Travel loans fall under the umbrella of personal loans and function in the same way as most others. Most travel loans will be unsecured personal loans with a fixed interest rate designed for use towards a holiday or general travel.

Generally, lenders will offer potential borrowers an amount between $2,000 and $75,000 and provide the option to pay it back over a term of one year all the way up to seven. These elements, as well as other policies, will be determined by the lender, so they may vary between each different lender depending on the type of loan you receive and your own financial history. 

This presents borrowers with a golden opportunity to compare lenders through whatever aspect of the loan they find the most important. We pride ourselves on comparing loans where they matter to you, so you can look at different lenders’ deals in our rate table. 

How can I effectively compare travel loans?

Fortunately, travel loan seekers are afforded a wealth of options when it comes to how they may choose to compare between different loans. We’ve listed some of the key areas that you should consider below:

The type of loan

There are four main options when it comes to the types of loans you can go with for your travel needs. Term loans are the most common form of loan in the travel area. These align with the examples mentioned above, ostensibly functioning as an unsecured, fixed-rate personal loan. A line of credit can be another sensible option if you’re looking for travel financing options, which is a pre-defined amount of money like a personal loan but able to be drawn upon whenever the borrower needs it. Credit cards and short-term loans can work for smaller travel loan needs but are not advisable for amounts beyond what you’d be able to pay back within a month due to their extremely high interest rates. 

The length of the loan 

The time over which your loan spans will go a long way to dictating the amount you’ll pay for each instalment; basically, the longer the loan, the less money you’ll pay. Personal loans tend to cap their loan terms at seven years, with a minimum of one year, but this may differ slightly between lenders. It is also important to note that the longer the loan, the more interest and fees you’ll accrue, so shorter loans may be the way to go if you’re looking to avoid that.  

Interest and other fees 

Interest rates are easy to compare between lenders, but it’s also important to note how much each different personal loan will set you back in terms of fees. Lenders will have different policies when it comes to the exact amount they’ll charge, but application, instalment, annual, early and late repayment and early termination will all typically come with a cost. Some lenders may not charge for all of these, particularly early or additional repayment fees, so you should check with lenders in advance to find out their policies. 

Any other bonuses involved 

You may find that some loans will build in some extra sweeteners to draw you towards them, which might be worth considering. An example of this could be discounts on certain aspects of the holiday or insurance. It may not end up deciding which loan you choose to go with, but it can certainly influence it. 

Types of personal loan

Why compare personal loans through Savvy?

Top tips for planning your next holiday

Plan a cost-effective trip

A personal loan is a good financial boost that can be used to pay off holiday costs. However, you could end up paying more for your holiday than you should without a budget in place. Having a holiday destination in place already gives you the advantage of being able to plan around costs such as accommodation and travel, so you can apply for an adequate amount when applying for a loan. Saving on the side can help you budget for food and spending money which lowers costs. 

Look out for travel deals and discounts

There are a few things that you can do to minimise the cost of going on holiday. Researching for the best travel deals and discounts on things such as accommodation, meals, rental cars and more will give you clarity on your budget. There are some credit cards that come with rewards and frequent flyer points that can be used to make your travel economical. Checking to see how you can best utilise your points and rewards can be a saving grace. 

Make sure you have the right credit card

The type of credit card that you are planning to use abroad can affect your overall bill. Always keep in mind how your cards interest rate will affect your monthly repayments. If youre swiping abroad with an ordinary card you can attract a 3% foreign transaction fee, which can dampen anyone’s holiday mood. Using a 0% foreign transaction credit card can be useful as it charges no foreign transaction fee and converts to other currencies with no additional costs. 

Look into travel insurance

Having travel insurance will not only give you peace of mind but also protect you when you need it most. Australians choose different ways to insure themselves, which can be through an insurer or using their credit card for travel insurance. However, before you jet set to your destination, it's important you check what your insurance covers. Some travel insurance policies only cover you once you've left Australian soil and can't be used locally. 

Pros and cons of travel loans


Making your dream a reality 

If you’re not quite at the point with your finances where you can travel on your own funds, a travel loan can unlock the potential for you to go on that holiday you’ve always wanted 

Quicker application process

In comparison to larger financial undertakings, the process for applying for a travel loan is much quicker and easier 


Greater outlay on your holiday

While loans are very useful for making funds available to you up front, the interest rates and fees that they contain will ensure your overall spend is greater than what you received 

Tough early repayment fees

Some lenders may charge excessive fees for making early or additional repayments, so try to go with one that doesn’t slug you if you want that flexibility 

Common questions on travel loans answered

Can I get a co-borrower to sign the loan with me?

Yes – applying for a joint personal loan with your partner is a great way to share your expenses. They can work especially well if you need access to a large amount, but your credit score is not strong enough to access this amount on its own.

Can I get a loan to cover accommodation costs?

Yes – your travel loan doesn't have to be dedicated entirely to the cost of your flights or transport tickets. It can also help take care of accommodation costs, as well as anything else like food or entertainment.

Can I get financing for any destination I would like to travel to abroad?

Yes – because it's a loan designed for personal use without any asset collateral attached, you can use it to fly or travel anywhere you like. As long as you can get tickets or are able to drive there, a personal loan can cover it.

How much will my repayments be?

This will depend on how much you want to borrow and for how long. However, you can use our online calculator to find out how much you will be paying in monthly repayments.

How often can I make my repayments?

Our lenders offer flexible repayment plans that allow you to make payments weekly, fortnightly or monthly. However, many of them will also enable you to make additional payments towards your loan principal without incurring any fees for doing so, meaning you're not required to stick to the script for your repayments.

Will I be able to access financing even if I have bad credit?

Yes – we're partnered with flexible lenders who are ready and willing to work with people who've struggled with their credit score in the past. This will result in a lower borrowing capacity and higher interest rate, however.

Will I be able to get financing even though I haven’t set a destination?

Yes – as mentioned, because your loan isn't tied to the value of your holiday, you can take it out before you've settled on a destination or expenses if you wish. 

Helpful personal loan guides

Still looking for the right personal loan?

Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.