Scots borrow millions in loans to fund their perfect holiday

SCOTS are borrowing more than £239.2 million in loans to go on holiday, according to new research.

A study by MoneySuperMarket reveals the figure, which works out at more than £3,000 on average per person.

It shows Scots could be spending more than four times as much on their holidays than they initially predicted.

The research found that on average, Scots are willing to borrow £743 to fund a holiday.

However, the actual average holiday loan amount is just over £3,000 – meaning that a large percentage of holidaymakers could be spending more than anticipated.

When it comes to those in Scotland who are considering a holiday loan…

15 per cent would go abroad rather than staycation

14 per cent would upgrade to all-inclusive

7 per cent would fly business or first class

7 per cent would extend the length of their stay

7 per cent would upgrade to a hotel with an infinity pool

Almost half (48 per cent) of Brits are willing to borrow money in some capacity to go on holiday, with holiday loans now being the third most common way to fund a trip after saved cash and credit cards.

Millennials are most likely to borrow to fund their travels, with over a fifth saying that they would consider a holiday loan.

Two in five millennials who said they would take out a holiday loan would be open to using it to upgrade their hotel, compared to only 12 per cent of those aged 35+, while a quarter would use a loan to upgrade to an all-inclusive holiday.

When looking at the length of the loan, 44 per cent of Brits expect to take less than a year to pay off their debt. This figure rises for millennials, with over half (53 per cent) believing that they’ll be able pay off their holiday loan in less than a year. In reality, the average term is nearly two and a half years (29.3 months). 

Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “When looking for a loan, it is important to shop around, compare rates of interest and any fees or charges, and ensure you understand the terms of payment.”

For more information, visit MoneySuperMarket’s new “Growing Trend of Holiday Loans” page for more in-depth results around funding the perfect holiday.