Dreaming of sipping cocktails in Fiji or road-tripping across New Zealand, but your bank account’s screaming “not today”? You’re not alone. Times are tight, and some Kiwis are turning to personal loans to fund their holidays — but is that a smart move?
Let’s look at the pros and cons of using a loan to pay for your next holiday, so you can make a decision that won’t leave you with a financial hangover.
Pros of Getting a Loan for a Holiday
1. You Can Travel Sooner
The biggest perk of taking out a holiday loan is simple — you don’t have to wait! If you’ve got time off work coming up, or a once-in-a-lifetime opportunity that won’t wait for your savings to catch up, a loan for a vacation can make it happen. At Loansmart, you can apply in 2 minutes and potentially get approved within 1-2 hours*.
2. Flexible Repayment Options
With Loansmart, you can borrow up to $75,000 unsecured and take up to 84 months to repay it. That means you can choose a repayment schedule that suits your lifestyle and budget — no stressing about how to pay it all back in a short space of time.
3. No Need to Dip into Savings
You’ve probably worked hard to build your emergency savings — using them for a holiday might not feel right. A loan for a holiday lets you keep that safety net in place while still getting to enjoy some well-deserved time away.
4. Fixed Costs and Easy Budgeting
Unlike a credit card, a personal loan usually has a fixed interest rate and set repayments. You’ll know exactly how much you’re paying and for how long. No nasty surprises. At Loansmart, rates start from 9.95%*, and we’ll find you a low-cost lender with fair terms.
5. You Can Still Get a Loan With Bad Credit
Even if your credit score isn’t perfect, you might still qualify for a low-cost loan for a vacation through Loansmart. We look at your full situation, not just the numbers, and work with a wide range of lenders to give you more chances of approval.
Cons of Using a Loan for a Holiday
1. You’ll Be Paying Off Your Holiday After It's Over
You had the time of your life at that beachside resort—but paying it off for months (or years) after you’ve returned can be a buzzkill. Holidays should be relaxing, but lingering debt might keep the stress going longer than your tan.
2. Interest Adds Up
Even with a competitive rate, you’re still paying interest. A $5,000 loan for a vacation could end up costing more than $6,000 over time depending on your rate and term. That adds a fair chunk to the price of your trip.
3. Can Affect Your Credit Score
Taking on any debt impacts your credit profile. Sometimes for the better, because if you make all your repayments on time your credit score will benefit. But if you miss repayments or take out multiple loans at once, your credit score could take a hit — making it harder to borrow in the future. So, it’s important to make sure you’re not overcommitting and that you can make your loan repayments.
4. It's Easy to Overspend
When you’re using borrowed money, it’s tempting to upgrade that hotel or stretch the trip a little longer. But small upgrades can snowball into a much bigger loan than you planned. Before you know it, you’re repaying a luxury trip that started off as a budget break.
5. It’s Not Right for Every Budget
If your current financial situation is already a bit tight, adding another repayment could be risky. You don’t want a holiday to turn into a long-term burden. That’s why Loansmart works with you to create a smart repayment plan — one that fits your life, not one that adds pressure.
Real Story: How Marama Made Her Dream Holiday Happen
Marama, a Loansmart client, wanted to surprise her husband with a special anniversary holiday. She tried her bank first, but they declined her loan for a holiday because they incorrectly assumed she was paying half the mortgage — even though her actual payments were much less.
Frustrated, she came to Loansmart. Our team looked at her real situation and connected her with a lender who used a bit of common sense. The result? She got the loan for a vacation, booked the trip, and pulled off a beautiful surprise — all without the stress or hassle.
It’s a great example of how we go beyond the numbers to find fair, fast loan solutions that work in the real world.
When Does It Make Sense to Use a Travel Loan?
Here are a few times it might actually make good financial sense to get a loan for a holiday:
- You’ve found a crazy good travel deal that won’t last.
- It’s a once-in-a-lifetime event like a honeymoon, family reunion or overseas wedding.
- You’ve got a steady income and a clear budget to repay it without stress.
- You want to avoid draining your savings or using high-interest credit cards.
When You Might Want to Skip a Loan for a Vacation
You might want to think twice if:
- Your income is unstable or already stretched thin.
- You don’t have a plan to repay the loan.
- You’re already juggling other debts or credit cards.
- .The holiday is more of a “nice to have” than a real priority.
A Smarter Way to Borrow
If you do decide to go the travel loan route, do it smart.
With Loansmart, you get:
- Access to multiple low-cost lenders
- Expert advice to help you make the best choice
- Fast approval (often within 1–2 hours*)
- A caring team that looks after your financial wellbeing
We don’t just approve your loan and send you on your way. We help you figure out how to pay it off easily, with less stress and more flexibility.
Ready to turn your dream holiday into a smart decision?
Apply Now!
*Subject to responsible lending checks and criteria
Holiday Loan FAQs
Is it a good idea to get a loan for a holiday?
It can be, if you’ve got a steady income and a repayment plan. Loans let you travel sooner without touching savings — but you’ll need to repay it after the trip, with interest.
What’s better — a loan for a vacation or using a credit card?
A loan typically has a lower, fixed rate and structured repayments. Credit cards often come with higher interest and no fixed repayment schedule, which can lead to long-term debt.
Can I get a holiday loan with bad credit?
Possibly. Loansmart looks at your full situation, not just your score. Many clients with past credit issues still get approved.
