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Borrowing money for a winter sports holiday

There’s no getting away from it – winter sports holidays can be an expensive business. Although there are some great deals out there, they are still a lot pricier than your average cheap and cheerful sunshine holiday, especially if you have to purchase or hire equipment. Of course, you could save up the money that you need, and if you aren’t planning to go for a while, this makes a lot more sense financially, but if you are planning to go soon and don’t have the money saved up, you will have to borrow the money from somewhere. When it comes to borrowing money from a private lender, you essentially have three options: secured loans, unsecured loans, and credit cards. Here, we shall discuss the ins and outs of each approach in turn.

Secured loans

Also known as homeowner loans, you can only obtain these if you own a property. If you fall too far behind with the payments on a secured loan, the lender may force the sale of your home in order to recoup the money they have loaned to you. These loans typically offer the highest loan amounts and the most attractive interest rates, so if you are fairly financially secure and own your own property, they could be the best option.

Unsecured loans

Also known as personal loans, these can be obtained without having to put up your home as collateral. This makes it a bit more of a risk to the lender, so in order to obtain one of these, you have to have a pretty good record of paying off loans in the past, and you will be required to provide the lender with proof of your income and a number of other details about your finances. The loan amounts tend to be smaller, and the interest rates higher, than you would get with a secured loan. Also, the interest rates tend to be higher than you would get with a credit card, but at least the repayments are structured in a way that guarantees that you will pay off the loan within an agreed period of time, whereas you could end up paying off a credit card forever.

Credit Cards

If you do not own your own home, and you are disciplined about paying it back, then these usually represent better value than unsecured loans. As with personal loans, credit checks and proof of income are required when applying. Some cards will offer a low or zero interest rate for an introductory period, so if you pay it off during this time, you won’t have to pay much interest. However, if you only pay the minimum payment every month, you could get stuck paying it off forever, and paying a lot more than you would with the equivalent personal loan. For more information about credit cards and loans, visit the Santander website.

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