Holiday loans more popular with Aussies than they've been in 5 years

Woman in gondola

After the Euro Summer we just saw, you might be wondering how everyone is affording these grand holidays during a pretty tough economic turndown. If you don’t have a bulked up savings account due to the rising cost of living expenses, don’t give up yet, it could still be you sipping an aperol spritz in Mykonos. 

According to data from the ABS, the number of new personal loans taken out in July rose almost 5%. 

Notably, the use of holiday personal loans increased by over 12% in July - resulting in the highest amount of new holidays loans taken out in the last 5 years. 

Rachel Wastell, Mozo consumer spokesperson said the drive in demand for personal loans wasn’t surprising. 

“After being stuck at home for essentially two years, Aussies are keen for a holiday, and using personal loans can be a great way to get the holiday of your dreams, as long as you have a clear plan on how to pay it back,” says Wastell. 

When it comes to borrowing credit there are certainly many options. Credit cards rival personal loans as they are easier to access, but they tend to clock in with higher average interest rates - this might be why Aussies are choosing to turn to personal loans. 

For example, the average credit card rate in the Mozo database is currently 17.01%. If you were to spend $10,000 on a holiday overseas and your budget only allowed for $324 monthly repayments - you would end up paying $3,444 in interest and fees on top of the original amount you owed. 

In comparison, the current average interest rate for an unsecured personal loan is 10.34%. Using the same loan and monthly repayment figures, the total amount of interest you would pay in this scenario would be $1,674. That’s a saving of $1,770! 

This example is only using averages, so this means there is potential to further decrease the interest payable by finding the best rates out there. Check out some of our editors' picks for best personal loans, or compare personal loans down below.

Compare personal loans - last updated 23 May 2024

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
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