Funding the Summer Holiday in 2026: Savings, a Holiday Loan, or Splitting Payments?
Borrowing for a holiday means paying interest on an experience that leaves no lasting asset behind — which makes the comparison against saving in advance sharper than for almost any other type of purchase.
Why Holiday Borrowing Gets Extra Scrutiny
| Purchase Type | What's Left After Paying It Off |
|---|---|
| Holiday | The memory — no resale or ongoing asset value |
| Car, furniture, appliance | A physical asset with some ongoing use or value |
Loan Calculator
Calculate monthly loan repayments, total interest and cost of borrowing.
Open Loan calculatorPackage Holiday Instalment Plans
Many providers allow booking with a deposit and paying the balance in instalments before departure, often without an interest charge — functioning more like a payment schedule than a credit product. Checking the specific booking terms confirms whether this is genuinely interest-free.
A Dedicated Holiday Savings Pot
Keeping holiday savings separate from general savings or an emergency fund makes budgeting more deliberate, helping avoid dipping into general savings for other purposes and finding a shortfall when the balance is due.
Savings Calculator
Project how your savings will grow over time with regular deposits and interest.
Open Savings calculatorDeciding How to Fund a Summer Holiday
- Start a dedicated savings pot well ahead of the travel date.
- Check whether a package provider's instalment plan is genuinely interest-free.
- Consider a 0% purchase credit card, used within its interest-free period, if savings alone won't be enough.
- Compare a personal loan's total cost realistically if time is short.
- Be realistic that any paid interest adds a real cost to an experience with no lasting resale value.
Frequently asked questions
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