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Travel Loan

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  • 28-04-2009 5:26pm
    #1
    Sony
    Closed Accounts Posts: 301 ✭✭


    Hi all,

    I have some capital for downpayment on a house but want to spend 35k over the next 18 months travelling (all planned out)...I have 100k capital but was wondering if any institution would lend me the 35 k instead (maybe using capital as gaurantee?) so i can pay off my travel loan over the next 10/15 years

    know it sounds odd but id rather pay something like this off over long term - it would always be worth it

    thanks you


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    #2
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,919 Admin ✭✭✭✭✭Toots


    TBH, I'd say you'd find it difficult to get a travel loan for that amount. I seriously doubt they'd let you pay it back over such a long term also. The standard term of a loan would be about 5 years.


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    #3
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    Toots85 wrote: »
    TBH, I'd say you'd find it difficult to get a travel loan for that amount. I seriously doubt they'd let you pay it back over such a long term also. The standard term of a loan would be about 5 years.

    Absolute max 7 years. I too would find it difficult to see you getting a loan for the amount involved (TBH it's wouldn't matter for what purpose it was for). Some banks can take a lien over part of your deposits, how in ever in saying this it's highly unlikely any of the smaller banks would have the resources to be taking security / bother their arse. The difficulty I would have is that after 18 months you still have 100k of a deposit that will more than likely go straight towards buying a house. What happens to the loan?

    Anyhow why bother with a loan? The most you could postpone payments would be for 3 months anyhow. Just drip feed money from your deposit as you need it.


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    #4
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    You also need to realise that you won't get much of a mortgage while you have outstanding loans.

    The amount of money you can borrow is based on your DSR (Debt Service Ratio). This is the percentage of your income going towards debt. Say, for example you earn 4,000 per month and the max DSR the bank will lend to you is 40%. This means that the most you will be allowed repay on all your debts is 1,600. If you are repaying, say 600 a month on the travel loan, that will leave you with only 1,000 to service the mortgage. Thus, you will only be able to take out a much smaller mortgage than you would if you did not have the loan.

    As others have said, you are unlikely to be lent that much money, seeing as you won't have any/much income during your travels, and the max that any bank will lend for is 7 years, typically a lot less.


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