Hanging out with friends, celebrating the end of the school year and getting those perfect pics for your Instagram feed: who doesn’t fantasise about a summer holiday all winter?
But new research by MoneySuperMarket has revealed that the perfect break in the sun comes with a hefty price tag. As the cost of living rises but salaries remain consistent, millennials are turning to holiday loans to top up their tan.
Show me the money
That bronzed look will cost you more than a bottle of Fake Bake out of Superdrug. Millennials have borrowed over £130 million in holiday loans since 2016, around £15 million more than all other age groups combined.
Glasgow comes in third for the biggest borrowers accounting for over £6 million of loans. Belfast and Birmingham take the top two spots, responsible for £6.9 million and £7.5 million respectively.
Over a fifth of British millennials say they would consider taking out a holiday loan to fund their travel. Two in five say they would use it to upgrade their hotel or package to all inclusive.
Repayment
Once your holiday is over and you’ve ran out of photos for #ThrowbackThursday, you might expect to pay off what you borrow within a year. The reality is that you’ll be pale again long before you are out of debt.
Just over half of millennials believe that they’ll be able to pay off their holiday loan in less than a year, but the average time taken to pay off this type of loan is nearly two and a half years.
That means money coming out of your wages for around 29 months.
Before you book
Before you take out a holiday loan consider whether it’s really necessary. It could be worth saving for a holiday for a little longer instead of borrowing money that could take years to pay back.
Your bank account might thank you for taking a short city break instead of a long beach holiday or for doing it on the cheap.
If a holiday loan is your only option then do plenty of research first. The MoneySuperMarket affordability checker tells you how likely you are to be accepted for a loan.
Do you struggle to get your head around money? Us too! We’re breaking down ISAs, credit cards, student loans and the emotional side of money for our Source Money Series.
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