all forms of holidays are good, but those that also involve going far away, to unknown places, have a plus: “They help to get away from the stressful parts of life and can help improve your perspectives and provide new points of view, because they allow you to develop strategies to deal with problems,” says the Canadian doctor Mel Borin in his book ‘Go Away Just For The Health of It’, ‘Go Away Just For The Health of It’. “When stress and tension begin to affect your productivityconsider going on a trip to allow your body and mind to recover; the holidays are dressings“recommends Borin.
Something that practically nobody would dare to refute. But what happens in this time of soaring inflation and uncertain economy? According to the results of the study ‘Observatory of the Domestic Economy’recently prepared by Cofidis, 35% of the Spanish population say they live from day to day and without having the capacity to save money enough to face one of these great ‘therapeutic’ trips that Borins proposes.
And what is as clear as the benefits that a great trip brings us is that it “represents an extraordinary outlay for our economy and a financial cost if we don’t have savings to carry it out and we have to resort to other people’s money”, points out Juan del Real, economist and expert in consumption. An affordable cost? Is it worth requesting a credit to go on vacation? According to psychologist Thomas Gilovich, professor at the American University of Cornell“Traveling is one of the best things we can do in our lives, because the trip and its preparations cause more happiness in us than the act of buying something material”.
However, in the opinion of Juan del Royal, senior executive, with 21 years of experience, ofConsumoteca and the financial education blog Finlit, the answer to the question “depends completely on the borrowing capacity of each person. An individual should not borrow more than one 30% of your income a month so that it does not involve an economic overexertion”. And, he insists, it is only worth asking for a credit to travel if you are completely sure that you can “return the requested money within the agreed period”.
How to request a loan
Therefore, the first thing to do before ordering a loan for a pleasure trip is to know our financial situation well. In this sense, “whoever has a good planning knows the difference between an expendable and an essential expense, and between a foreseeable extraordinary expense (the trip is known as forecastcar insurance, too) and an extraordinary one, such as an accident at home or with the car, a traffic fine, a job that falls out or a toothache that requires a root canal”, adds del Real.
And from there, his first recommendation. “Do not ask for a loan to travel if you do not have your next essential expenses well covered”, including in this chapter also those that arrive in September, for example, with going back to school or university. “And don’t ask for it either if you don’t have extraordinary expenses covered unexpected with the help of insurance (home, unemployment, health, etc.),” he adds.
In short, only once this problem has been solved financial year and verified that “we have well covered the future expenses, we could face this disbursement for the trip”, affirms del Real. And then the problem will not be to obtain the loan, but to find one that does not bankrupt us and allows us get into debt with head; As they assure from the Organization of Consumers and Users (OCU), “it is not uncommon to find microcredits with interest above 70% APR, despite the Supreme Court ruling that considered an interest of 27% APR on a credit card as usury “. Something that shocks more when it comes to those small amounts destined to finance a trip, because it is also possible to get ‘free’ money and “not pay interest. If you do not need more than a thousand euros and can be returned in three months, there are cards with a 0% ETA, such as the Wizink Click”, they point out from the OCU.
Where to ask for a quick loan?
In this sense, the OCU experts assure that what is important when we consider requesting a personal loan is to opt “for the most cockroach and less trouble getting money.” And what is it?
“When it comes to financing vacations, it is possible to go to different types of entitiesfrom banks to other regulated ones, as well as the possibility of postponing payment with a credit card”, explains Ana Morales Rosado, head of the Studies Service of the National Association of Financial Credit Establishments (ASNEF). “There are different types of financing, each with its own characteristics, so it is important to choose the one that best suits the situation.”
As an example, Morales Rosado points to the revolving creditwhich is quite different from consumer loan traditional and stands out for its flexibility, since “you only pay for the money that is used. And once the loan is repaid, the line of credit is renewed automatically, unless it is not your wish”. However, “it is important to use responsible and never request a loan for an amount higher than the recommended one based on our ability to pay”, warns the expert. A point that also affects Juan del Real: “Monthly savings must always be guaranteed; you must follow the ‘pay yourself first’ principle”.
And, so as not to be surprised, the most important advice of Ana Morales Rosado is “going to an entity regulated and supervised by the Bank of Spainbecause they offer great protection and security legal”.
What kind of interest?
The other key to requesting a loan wisely is to remember the two rules of a well-known advertisement: search and compare offers. “You have to look at the APR (Annual Equivalent Rate), which includes commissions, type Nominal interest (the percentage that is agreed as the price of the borrowed money) and other expenses of the operation, that is, the total that is going to be paid for the requested money”, explains Pink Morales. “It is the objective data to compare the cost of a loan,” they add from the OCU, which recommends contracting an index below 6% for this type of credit.
It is also important that the return period allows to face the payment of the loan “in a comfortable way and that does not compromise personal finances, without being overwhelmed”, says Pink Morales. Here, it is time to look at the amount of the dues. “A priori, lower ones are more interesting, but they can cause the payment to be extended over time. That is why it is essential that the amount allows the debt to be amortized with each payment, with the aim of return the loan as soon as possible.
Before requesting a loan for the holidays
Apart from the need “to go to entities regulated and supervised by the Bank of Spain”, insists Pink Moralesand the recommendation to compare “at least personal loans from banks, savings and credit cooperatives, credit card companies, platforms that manage loans between individuals and online lenders (Cetelem and company),” he adds Juan del Royal, It is important to “study the conditions well, especially the interest rate (APR), the repayment term, interest on arrears, and fees,” says Ana Morales Rosado. For this it is very useful to resort to the comparators of loans and value “pears with pears, always fixing the same amount with the same duration of the loan (in months) and compare APRs, which will include the Nominal interest of the loan and any commission that affects it”, says del Real, who advises also to look at the general conditions of hiring (the small print), since they usually include all kinds of commissions and penalties if you are late on a payment.
Finally, it is worth evaluating the possibility of requesting a protection insurance of payments, which “will cover us in the event that we cannot take care of it due to sick leave, illness, accident or unemployment,” concludes Morales Rosado.