How to manage holiday debt
The gentle percussion of tumbling waves and a chorus of giggling children provide the perfect backing track as you lie there on the sun bed lapping up the sun’s rays in pure bliss and relaxation. The sweet smell of coconut-infused sun cream wafts along on the subtle sea breeze as you doze contently, catching up from the night before………and then the horn of the car behind brings you back from paradise with a jump, angrily requesting that you move a few more paces forward in the normal Monday morning commuter traffic.
It’s September and the summer holiday is now consigned to the memory as you refocus on getting to work, thinking of all the things you’ve got to do and how you’re going to pay off the loans that helped facilitate that dream holiday two weeks ago.
And you’re not the only one. It is estimated that over two million holidaymakers take out loans to help fund their summer vacation. Whether it be to help with covering the cost of travel, booking the hotel with the pool and sea view, or just spending when in the resort, various loan packages are taken out each summer to make sure your week in the sun isn’t compromised. The most common method of loan funding used by holidaymakers is credit card, and quite often using more than one at that to pay for various elements of the trip.
Now that you’re back on home soil, the pressures of life come sharply back into focus though. Holidays nearly always turn out to be slightly more expensive than you think, and juggling the loan repayments can feel quite overwhelming for some.
Planning on how to pay back the loans in a manageable way is key, and looking at the various repayment rates is a good place to start either to help prioritise repayments or to enable you to look at what suitable alternative deals might be available.
A 0% balance transfer card could be the solution for some, and there are some good deals currently available, but be careful not to apply for cards willy-nilly, as it could have a negative impact on your credit rating. You need to make sure that you clear the debts or shift again before the 0% ends otherwise rates will catch you out, so the higher the debt and the longer you need to clear it should be considered.
Another option, especially where there are several other loan repayments required, may be to look at a debt consolidation loan, bringing all loans under one simple repayment spread over a longer period of time. This could help to repay some of the more expensive debts and leave you with a more manageable monthly payment that makes sure the memory of that relaxing holiday doesn’t get overtaken on life’s carousel by a suitcase full of debt worry.