This time of year, it is fair to say, can be challenging for many of us for a multitude of reasons. And there is no getting away from it – the combination of short daylight hours and the typical wintry weather can leave a lot of us feeling gloomy. It’s no wonder great numbers of Britons yearn for a holiday over the festive season, even if just for a bit of escapism.
But if you’re reading this article, presumably, it’s because you’ve checked your bank account prior to booking a winter break, only to see you’re running on empty (or at least, almost empty).
So, do you need to forget all notion of enjoying a Christmas holiday this year? Our answer would be: not necessarily. Below, we have set out some of the possibilities for making an off-season break more affordable for you, whatever destination you may have in mind.
Saving up for a holiday in advance
Yes, this might not seem like a very useful tip if you hanker for a Christmas holiday right now, and have hardly anything in your bank account. But if there is any way in which you can combine savings with whatever other method you might have been considering to pay for your holiday (such as a loan), this could greatly help minimize your financial risk.
Maybe you have savings put to one side that you had intended for something else – such as a new car – but you have decided you could live with a cheaper and less “glamorous” second-hand motor? If so, well done – you’ve just freed up some cash that you could spend on that much-needed Yuletide overseas break.
Using a 0% credit card
A lot of people decide to pay for a holiday on a 0% credit card, because of the consumer protection this provides (always useful, given that you can never rule out your chosen holiday package provider or airline going bust).
Those people typically pay off their holiday in full shortly before the promotional 0% rate ends on the credit card, so that they don’t get hit with a big chunk of interest. This tends to be about six months to 12 months. So, if you wish to use this method, you will need to know exactly when the 0% rate on purchases comes to an end for your own card.
Once you have determined this, you might opt to set up a fixed direct debit, so that the money leaves your account on payday, or whenever else you are able to repay the entire amount, before the date interest begins to apply.
Releasing equity
If you’re a homeowner of 55 years of age, it may be possible for you to release tax-free cash to help pay for your home, at the same time as being able to stay in your own home. This route typically entails taking out a loan that is secured against your property. There won’t be any need for you to repay anything until you either die, or move out of your home into long-term care.
If equity release is an option you are considering for funding your holiday, it is really important to discuss this with a qualified advisor, from a reputable source such as MoneyHelper. They will be able to set out your options, and answer any questions you have about the process, so that you are fully educated on the implications. Equity release is a significant financial decision with long-term implications. Always consult with a qualified advisor before proceeding.
Taking out a short-term loan
Of course, we are in the business of helping to provide loans here at CashCompare, so you might expect us to endorse them as an option for making your longed-for holiday affordable.
Our overriding message here, however, would be the same as it is for all the other options in this list: be careful when considering the implications.
Before considering a short term loan, be aware of the risks including high interest rates and potential impact on your credit score if repayments are not made on time. Committing to a short-term loan to help pay for a holiday – perhaps combined with other measures, such as any money already saved up – is a solution that has worked out for many people. But you will need to be sure that you can complete all the repayments on any loan that you agree to, by the required dates.
We help out people who are considering the merits of loans, by providing a no-obligation quote request form. CashCompare is a credit broker authorized and regulated by the Financial Conduct Authority, ensuring our commitment to responsible lending practices. We scour the broader market for the right loans for any of a wide range of circumstances. So, you might be tempted to try out our service if you are contemplating what the possibilities may be for you.
Whatever decisions you do take to help you afford a winter holiday, we would urge you to only make careful and responsible choices – and, of course, to have fun on your hard-earned break!
"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.