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What are holiday loans?
A holiday loan is a way to spread the cost of your trip – if you don’t have all the money upfront – by borrowing a set amount.
With an unsecured loan, the interest rate is fixed so you’ll know exactly what your monthly loan repayments will be for the duration of the loan.
You can decide the total amount you'll need and how long you want to borrow for.
How do holiday loans work?
Here’s what to expect when you take out a loan for a holiday:
Apply for the loan: Decide how much you’ll want and how long you’ll need to pay it back (the loan term) and compare to find the best rate (APR) for you. Then apply online.
Receive your money: If you’re accepted for a holiday loan, the money should be in your bank quickly. It can range from a few minutes to a few days, depending on the provider.
Pay the loan back: You’ll usually start to make monthly repayments straightaway to pay back your loan. Your interest rate and monthly repayments are fixed from the outset.
Use our handy loans calculator
Use our handy personal loan calculator tool to find out how much your monthly repayments could be, and how much you can afford to borrow
Loan calculator
Find out what monthly repayments would be, how much you'll pay overall and how much you could borrow.
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Based on the information you supplied, you would be borrowing XXX and repaying the loan in XXX monthly instalments of . The total sum to repay, subject to XXX% APR over the full loan term would be XXX. This assumes there are no extra fees and that your payments are made on time and in full.
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Based on the information you supplied, you could borrow XXX at a monthly repayment rate of to be paid over XXX monthly instalments. Over the full loan term at XXX% APR, the total amount repayable would be XXX. This assumes there are no extra fees and that your payments are made on time and in full.
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The maximum personal loan is £50,000
If you need a larger amount, consider a secured loan, which will allow you to borrow more but uses your home as collateral. Be aware that lenders can sell your house if you fail to keep up with repayments.
What is the best type of loan for a holiday?
For a holiday, an unsecured personal loan is usually your best option. It lets you borrow a fixed amount and repay it in monthly instalments, without needing to put up assets like your home as security.
Try to avoid payday loans – they’re expensive and only for emergencies. Guarantor loans are typically aimed at those with poor credit and not ideal to cover a vacation.
Depending on the cost of the holiday, a credit card could be a sensible choice. Cards with 0% deals give you time to clear the balance without paying interest and you also receive added protection when you book.
Am I eligible for a holiday loan?
To be eligible for a holiday loan, you’ll need to meet some basic requirements set by most lenders. Approval will depend on your credit history, income, and overall financial situation.
While each provider has its own criteria, most will expect the following:
Be at least 18 years old
Live permanently in the UK
Have a regular income (from employment, self-employment or a pension)
Hold a UK bank account
Pass a credit check
Can I get a holiday loan with bad credit?
If you’ve struggled with debts in the past and have a low credit score it doesn’t always mean an instant ‘no’ to borrowing money. But you may find it more difficult to get a loan.
Specialist lenders offer loans to borrowers with a lower credit rating. You should expect to be offered higher interest rates and a smaller loan.
You can search for these deals with MoneySuperMarket – and comparing in this way won’t affect your credit history.
But bear in mind if you’re in financial difficulty, taking out a new loan could put you in a worse situation.
What do I need to consider before taking out a holiday loan?
There are several factors to consider before taking out a holiday loan. These include:
Can I afford the repayments?
Make sure monthly instalments fit comfortably within your budget
Is borrowing the right option?
Consider if you can save up instead to avoid paying interest
What’s the total cost?
Look beyond the monthly payment. Check the interest rate and total amount repayable
Have I compared deals?
Use a loan comparison tool to find the most competitive rates and terms
How long will I be repaying it?
Avoid repaying a holiday loan long after the trip is over
What’s my credit score like?
A better credit score can unlock lower interest rates
What are the pros and cons of a holiday loan?
There are advantages and disadvantages to taking out a holiday loan, as follows:
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Pros
Spread the cost of your holiday over affordable monthly payments
No need to delay your trip as you save
Fixed interest rates make budgeting easier
Quick approval and fast access to funds
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Cons
You’ll pay interest, making the holiday more expensive overall
Missing repayments can hurt your credit score
Borrowing for non-essential spending adds long-term debt
Repayments may continue long after the holiday ends
How much can I borrow?
For a holiday loan, you can typically borrow between £1,000 and £25,000. This is less than you’d get with a secured loan, as there’s no asset like your home backing the loan.
The average amount sought by MoneySuperMarket users for loans to fund a holiday is £4736.77
Our loan calculator can help give an estimate of monthly costs for different sized loans at different rates.
What’s the repayment period?
Repayment terms usually range from 6 months to 5 years. Since it’s for a one-off trip, shorter terms are often better to avoid paying interest long after your holiday ends.
How quickly can I get approved?
Approval can be near-instant with many lenders if you apply online. If accepted, the money could be in your account within a few hours or a couple of working days.
How much do people borrow for holiday loans?
The most common loan amount for those looking to fund a holiday is between £1000 and £2,999, based on MoneySuperMarket data from September 2024. Our chart shows how much people typically borrow.
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Will base rate cuts make borrowing cheaper?
The Bank of England cut its base rate to 4.25% in May, which could make small loans cheaper, but the impact can take time to filter through.
While base rate cuts often lead to lower interest rates on borrowing, not all lenders pass on the savings straight away. Some may adjust their rates quickly, while others could take weeks or longer to make changes.
If you're considering a small loan, it’s worth comparing offers to see which lenders have already responded to the rate cut. Keep in mind that your credit score and personal circumstances will also affect the rate you’re offered.
Is taking out a holiday loan the right option for me?
Taking out a holiday loan could be the right choice if you’ve found the perfect getaway and want to lock in the best dates without having to wait. It can help spread the cost with fixed monthly payments, especially if you’ve planned a clear and affordable repayment strategy.
But it’s important to think carefully before borrowing. Taking on debt to pay for a holiday could put pressure on your finances, particularly if you have other financial priorities. Make sure the repayments won’t stretch your budget and that you’re not borrowing more than you can realistically afford.
What are the alternative ways to pay for a holiday?
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Credit card
A 0% purchase credit card lets you spread the cost of your holiday interest-free over a set period. You’ll also get extra protection under Section 75 if your airline or holiday provider goes bust.
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Savings
Using your savings means no interest charges and the satisfaction of paying upfront. It’s a great way to avoid debt while rewarding your financial planning.
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Travel company finance
Some travel companies offer payment plans, letting you pay a deposit and clear the balance in instalments. Always check the interest rate and any extra fees.
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Buy now, pay later (BNPL)
Services like Klarna or PayPal Credit let you delay or spread payments. Be sure to read the terms. Late payments can add fees and affect your credit score
Can I use my holiday loan for something else?
Yes. Most unsecured personal loans don’t require you to spend the money on a specific purpose. That means you could use the funds for something else, such as a car purchase or consolidating debt.
However, there are restrictions. Most lenders won’t allow personal loans to be used for gambling, investing in stocks or cryptocurrencies, or for business purposes.
Always check your loan agreement for any usage exclusions before spending the funds elsewhere. Misusing the loan could breach the terms and affect your future borrowing.
Compare holiday loans with MoneySuperMarket
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Our expert says…
Taking out a loan to go on holiday might feel extravagant, but it could also be a case of looking at the bigger picture. A break and a refresh can be seen as an investment into your own health and productivity when you return. If you are going to borrow to travel though, make sure you understand the terms of the deal and that you’ll be able to afford the monthly repayments.
Kara Gammell Personal Finance & Insurance Expert
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Our recommended guides
Can I get a loan to travel the world?
You can take out a loan to cover the cost of your holiday, just like you would to cover home renovations or a wedding. If you’re looking to travel the world for an extended period of time, you may need to apply for the loan while you’re in the UK as you’ll need a permanent UK address when you apply. Lenders will ask for a proof of income, so make sure you can afford to take on a holiday loan.
What’s the difference between a holiday loan and loan holiday?
Unlike a holiday loan where you’d take out a loan to fund your travels, a loan holiday or ‘payment holiday’ is a period of time where you won’t have to make any loan repayments. Usually a loan holiday will last for a month or two, and you’ll still be asked to pay interest on the missed repayments when you start paying off the loan again.
What details do I need to apply?
To apply for a holiday loan you’ll usually need the following:
Proof of income: Lenders might ask for evidence of your salary, such as on your pay slip or bank statement
Over 18: You’ll need to be over the age of 18 to apply for a holiday loan
Personal details: You’ll need to supply some personal details like your name and address
Where you live: Your current address and address history covering the last three years
Your spending: Lenders may ask for details about your income and outgoings
What is an APR?
An Annual Percentage Rate or APR is the interest rate you’ll pay on top of the money you’ve borrowed. It includes the interest rate you’ll pay, plus any other fees or charges, to give you a more accurate idea of what your loan will cost you. You’ll be told the APR of your holiday loan when you apply.
Can I pay back my holiday loan early?
You should usually be able to repay a personal unsecured loan early, although typically there will be early repayment charges (ERCs) applied by the lender.
If you think you may be able to pay back your loan early, check the terms and conditions of your loan deal before you sign up. It may be possible to find a loan with no or lower ERCs.
Can I use a holiday loan to pay for a vacation within the UK?
Yes. Once the loan has been approved and the funds are paid into your bank account you can use the money to pay for any holiday, anywhere in the world, including the UK!
Can I apply for a holiday loan if I’m self-employed?
Yes, many lenders accept self-employed applicants, but you may need to provide additional proof of income, such as tax returns or business accounts. Be prepared for extra checks compared to salaried employees.
What happens if I miss a holiday loan repayment?
Missing a repayment can lead to late fees, increased interest, and damage to your credit score. It’s important to contact your lender as soon as possible if you’re struggling to pay, as they may offer a payment plan or payment holiday.
Can I switch or refinance my holiday loan later?
Some lenders allow you to refinance or consolidate your loan to get better rates or longer repayment terms. Check your loan agreement for early repayment or refinancing options, and consider if switching will save you money overall.
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Reviewed on 12 Dec 2025 by
Based on the average loan amount from enquirys made on MoneySuperMarket in November 2025 where the purpose of the loan was Holiday.
Accurate as of September 2024
Accurate as of September 2024
Accurate as of September 2024
Accurate as of September 2024
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T&Cs and restrictions apply, see here for more information
T&Cs and restrictions apply, see here for more information
T&Cs apply, click here for more information