With the travel loan it is possible to obtain the liquidity necessary to carry out both a leisure holiday , a transfer linked for example to a study stay , or for medical treatments .
HOLIDAY LOAN CHARACTERISTICS
Through this type of loan it is possible to obtain a loan that covers up to 100% of the cost of the holiday. The amount paid is on average less than 10,000 euros, but can reach up to around 30,000 euros. In some cases, the financial companies also make available offers that include the costs of preliminary investigation and installment collection.
Given that the amounts disbursed for holiday loans are usually small, the preliminary and loan granting phase is very fast.
The loan can have a duration ranging from 12 to 60 months , and provides for a repayment at a fixed rate and constant installments .
The autonomous availability of the sum of money necessary for the holiday allows the applicant the maximum freedom to organize the trip . In fact, it becomes possible to decide to buy the trip in any agency or directly online, or even pay the living expenses directly at the resort.
Also, the holiday loan can be requested from the travel agency, taking advantage of agreements stipulated by the tour operator with specialized financial, almost always exclusive. In this way, on the one hand a discount can be obtained on the trip by virtue of the commission received by the agency on the brokered loan, on the other hand there is no possibility of choosing, among the available loan offers, the loan at the interest rate more convenient .
To obtain a holiday loan no specific requirements are required, as well as to prove that you have a certain income and a good credit rating.
THE ELEMENTS OF THE CONTRACT
The law establishes that a holiday loan contract must contain the following elements:
- the interest rate charged;
- any other price and condition applied, including the higher charges in the event of default;
- the amount and methods of financing;
- the number, amounts and expiry of the individual installments;
- the annual percentage rate of charge (APR);
- the detail of the analytical conditions according to which the APR can possibly be modified;
- the amount and purpose of the charges that are excluded from the APR calculation;
- any guarantees required;
- any insurance coverage required and not included in the APR calculation.
The law guarantees the consumer the possibility of early repayment of the loan. If the consumer decides to choose this option, in addition to the repayment of the residual capital, he could pay a penalty that must not exceed, by law, 1% of the financed capital; the exact terms of the penalty are reported in the signed contractual conditions.
Below we illustrate in a schematic way some specific evaluation criteria of the holiday loan.
- Risk policies: each Institute applies its own risk policy in the assessment of requests, based on the statistical data it has (credit scoring). This data is the tool that allows the Institute to keep insolvencies below a certain level.
- Income level: the acceptance of the requests is normally also subordinated to the evaluation of the income level of the applicant and to the relationship between the latter and the possible repayment installment.
- Creditworthiness: the creditworthiness of the applicant is of great importance. It is important to emphasize that this evaluation has no “moral” meaning. The Institutes are limited to estimating the level of risk connected to each request, also on the basis of the indications transmitted by the Central Risks. If the credit history of the applicant has some “flaws” (delays in repayments of previous loans, unpaid debts, etc.) the probability of the request being accepted is obviously lower. In some of these cases a valid alternative is constituted by the Assignment of the fifth: this solution, offering the appropriate guarantees to the financing Institute, allows the adoption of more flexible evaluation criteria.
Holiday loans are provided by financial institutions and banks. They do not require specific requirements, except for a certain income and a credit position of the applicant for the loan which confirms adequate financial reliability of the same.
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