Planning a holiday in 2025 is an exciting prospect—but also an expensive one. With rising travel costs for flights, accommodation, insurance, and activities, many Kiwis are looking for new ways to fund their getaways. For some, that means turning to holiday loans to make their dream trips a reality or to manage urgent travel needs.
If you’re considering using a personal loan to fund your travels, this guide is for you. We’ll explain how travel loans work, what to look for in a loan, and how to apply—so you can hit the runway without financial turbulence.
What Is a Holiday Loan?
A holiday loan is a type of personal loan used specifically for travel expenses. It’s usually unsecured, meaning no collateral is required. Borrowers commonly use them for:
Flights and accommodation
Tours and travel experiences
Travel insurance
Spending money while away
Pros and Cons of Taking Out a Travel Loan
Pros:
Book early to secure better deals One of the biggest advantages of using a loan for a holiday is the ability to book flights and accommodation in advance. Early booking can mean grabbing seasonal promotions, securing popular campervan rentals, or locking in discounted package deals for school holidays. This can save you hundreds of dollars, especially for travel during peak times like summer or the Christmas period.
Spread travel costs over time Rather than draining your savings all at once, a travel loan allows you to pay off your trip in manageable installments. For Kiwi families planning a big overseas adventure or couples dreaming of a luxury getaway, this can ease the financial burden and make budgeting more predictable. Instead of a large one-off expense, your travel costs are divided across several months.
Access dream holidays sooner For many New Zealanders, destinations like Europe, Japan, or the Pacific Islands are dream holidays that can take years to save for. A travel loan can turn that dream into a reality sooner. If you have stable income and a solid repayment plan, you can take the trip while you’re young and active, or while your kids are still at an age to enjoy it with you.
Cons:
Interest and repayments can accumulate Holiday loans are typically unsecured personal loans, which means they often come with higher interest rates. Over time, this can significantly increase the total cost of your trip. What starts as a $5,000 getaway could end up costing $6,500 or more depending on the loan term and rate. It’s crucial to compare lenders and check the total repayment amount before committing.
Risk of long-term debt if poorly managed If your budget is already tight, adding monthly loan repayments can lead to financial strain. Missing payments or extending the loan term may result in higher interest charges and fees. Without a clear repayment strategy, the short-term joy of a holiday can quickly become a long-term financial headache.
Budget pressure after the holiday ends It’s easy to enjoy now and worry later, but many travellers return from holiday only to face the reality of ongoing loan repayments. With expenses like school fees, household bills, and rising living costs in New Zealand, that post-holiday loan could restrict your financial flexibility for months or even years to come.
What to Look for in a Holiday Loan
When comparing holiday loans, it pays to assess a few important features:
Interest rates: fixed vs variable interest rates
Loan terms: short or long repayment periods
Fees: establishment costs, early repayment penalties
Application process: look for fast online approval options
Before applying, use a loan repayment calculator to understand what your repayments could look like. This can help you avoid surprises and stay within budget.
Who Can Apply for a Holiday Loan in NZ?
Most lenders have similar eligibility requirements. You can check general eligibility criteria on the Nectar Money website. Typically, you’ll need to:
Be a New Zealand citizen or resident
Be at least 18 years old
Have steady income or employment
Maintain a reasonable credit history
Some lenders may also consider applicants with lower credit scores, though higher interest rates usually apply.
How to Get a Holiday Loan in New Zealand
Here’s how to apply for a holiday loan in NZ:
Research and compare lenders
Check eligibility requirements
Gather documents – such as ID, proof of income, and bank statements
Apply online through a secure portal
Await approval and funding, which may take as little as 24–48 hours
Alternatives to a Holiday Loan
If you’d prefer to avoid borrowing, consider these options:
Save in advance using a travel savings account
Use a credit card—but only if you can repay quickly and avoid interest
Consider buy now, pay later services for tours or flights if you can meet the repayment schedule
Borrow from family or friends (with a clear agreement)
Travel during off-peak seasons for cheaper deals
Final Tips for Borrowing Smart
Only borrow what you can comfortably repay
Stick to your travel budget—don’t let access to credit tempt you to overspend
Plan your repayment strategy before you leave
Choose reputable lenders with transparent terms and good reviews
Personal finance advice
Used wisely, a holiday loan can help you enjoy your next trip without derailing your financial goals.
Unsure of how to manage your money? You can access free personal finance services or pay for professional personal finance advice.
How much can you borrow with a Nectar Money Personal Loan?
With Nectar Money you can borrow unsecured up to $40,000, or as little as $2,000. Use our loan repayment calculator to find out how much you could get.
Getting started with Nectar Money
Do you need a great rate on a holiday loan? We’d love to help with your personal loan requirements. Find out how much you could borrow and learn more about our personal loans. You can get started with Nectar Money and get a personalised loan quote online which will include your interest rate, maximum borrowing amount and repayment options.
Nectar Money – we make lending sweeter.*
*Nectar Money’s lending criteria and responsible lending checks apply.
