Our Pick Of The Best Holiday Loans
Funding the cost of an overseas holiday with savings or pre-designated funds is, of course, ideal. But, if this isn’t possible (and your budget allows) a competitive holiday loan could be the next best solution. But which holiday loans offer the best value? We carried out some research (April 2025) and listed the deals we found, below.
Our pick of the best holiday loans
All holiday loans listed require a good credit score. Rates are also representative so, if you are accepted for a loan, the APR you are offered could be higher. Information is correct at the time of publication. You can find more in our methodology, below.
Holiday loans between £1,000 and £2,999
John Lewis Finance (Zopa Bank)
Representative APR
9.9%
Early repayment charges*
yes
Borrowing term
1-7 years
Representative Example
Borrowing £2,000 at a representative APR of 9.9%, annual interest rate (fixed) 9.9%, will result in 60 monthly payments of £41.98. The total cost of credit is £518.89 and the total amount payable is £2,518.89.
Representative APR
9.9%
Early repayment charges*
yes
Borrowing term
1-7 years
Representative Example
Borrowing £2,000 at a representative APR of 9.9%, annual interest rate (fixed) 9.9%, will result in 60 monthly payments of £41.98. The total cost of credit is £518.89 and the total amount payable is £2,518.89.
John Lewis Finance is offering highly competitive loan rates for smaller sized loans, via Zopa Bank. The rate on a £1,000 loan could be as low as 9.9% APR. Remember however, that the rate you’re offered will be down to your own credit history and score. You could be offered a higher loan rate.
Overpayments are allowed, but full early repayment will incur a penalty charge.
John Lewis Finance states on its website that 95% of successful loan applicants receive their funds within hours.
You can track and monitor your loan online.
- competitive rates
- access to funds fast
- borrower over 1-7 years
- may not be offered lowest rates (subject to credit status)
Santander
Representative APR
13.5%
Early repayment charges*
Yes
Borrowing term
1 to 5 years
Borrowing £2,000 at a representative APR of 13.5%, annual interest rate (fixed) 13.5%, will result in 60 monthly payments of £45.23 The total cost of credit is £713.80 and the total amount payable is £2,713.80.
Representative APR
13.5%
Early repayment charges*
Yes
Borrowing term
1 to 5 years
Borrowing £2,000 at a representative APR of 13.5%, annual interest rate (fixed) 13.5%, will result in 60 monthly payments of £45.23 The total cost of credit is £713.80 and the total amount payable is £2,713.80.
Santander is offering competitive rates on smaller sized loans.
Loans can be taken over one to five years. There is flexibility to overpay on the loan but there are penalty charges for full early repayment.
- Competitive APR for smaller-sized loans
- Flexibility to make overpayments
- Preferential rates only apply to some existing customers (1/2/3 World and Santander Select)
- Loans only over one to five years
M&S Bank
Representative APR
14.9%
Early repayment penalties
yes
Borrowing term
1-7 years
Representative Example
Borrowing £2,000 at a representative APR of 14.9%, annual interest rate (fixed) 14.9%, will result in 60 monthly payments of £46.51. The total cost of credit is £790.32 and the total amount payable is £2,790.32.
Representative APR
14.9%
Early repayment penalties
yes
Borrowing term
1-7 years
Representative Example
Borrowing £2,000 at a representative APR of 14.9%, annual interest rate (fixed) 14.9%, will result in 60 monthly payments of £46.51. The total cost of credit is £790.32 and the total amount payable is £2,790.32.
M&S Bank is offering a competitive rate on small loans. Borrower over 1 to 7 years. Overpayments are allowed.
- Competitive APR for smaller-sized loans
- Borrow over one to seven years
- Early repayment charges
Holiday loans between £3,000 and £4,999
Novuna Personal Finance
Representative APR
9.7%
(on £4,000 to £4,999 only) 9.9% on £3,000 to £3,999
Early repayment penalties*
yes
Borrowing term
2-5 years
Representative Example
Borrowing £4,000 at a representative APR of 9.7%, annual interest rate (fixed) 9.7%, will result in 60 monthly payments of £83.60. The total cost of credit is £1,016 and the total amount payable is £5,016.
Representative APR
9.7%
(on £4,000 to £4,999 only) 9.9% on £3,000 to £3,999
Early repayment penalties*
yes
Borrowing term
2-5 years
Representative Example
Borrowing £4,000 at a representative APR of 9.7%, annual interest rate (fixed) 9.7%, will result in 60 monthly payments of £83.60. The total cost of credit is £1,016 and the total amount payable is £5,016.
Novuna Personal Finance is offering a low rate for loans of between £4,000 and £4,999 over two to five years. The rate may be lower for larger loan sizes.
- Competitive APR
- Early repayment penalties
Tesco Bank
Representative APR
9.8%
Tesco Clubcard holders only
Early repayment charges*
yes
Borrowing term
1-5 years
Representative Example
Borrowing £4,000 at a representative APR of 9.8%, annual interest rate (fixed) 9.8%, will result in 60 monthly payments of £83.78. The total cost of credit is £1,026.80 and the total amount payable is £5,026.80
Representative APR
9.8%
Tesco Clubcard holders only
Early repayment charges*
yes
Borrowing term
1-5 years
Representative Example
Borrowing £4,000 at a representative APR of 9.8%, annual interest rate (fixed) 9.8%, will result in 60 monthly payments of £83.78. The total cost of credit is £1,026.80 and the total amount payable is £5,026.80
Tesco Bank is offering a competitive rate for borrowing at this level if you have a Clubcard loyalty card. Loans can be taken over 1 to 5 years. Loans of the same value for non Clubcard holders have a rate of 13.1%.
- Competitive APR
- Quick approval process
- Early repayment penalties
- 5 year maximum term
best for longer repayment terms
M&S Bank
Representative APR
9.9%
Early Repayment Charges*
Yes
Borrowing term
1-7 years
Representative Example
Borrowing £4,000 at a representative APR of 9.9%, annual interest rate (fixed) 9.90%, will result in 60 monthly payments of £83.96. The total cost of credit is £1,037.78 and the total amount payable is £5,037.78.
Representative APR
9.9%
Early Repayment Charges*
Yes
Borrowing term
1-7 years
Representative Example
Borrowing £4,000 at a representative APR of 9.9%, annual interest rate (fixed) 9.90%, will result in 60 monthly payments of £83.96. The total cost of credit is £1,037.78 and the total amount payable is £5,037.78.
M&S is offering a competitive representative APR of 9.90% on loans over one to 7 years for borrowing of between £3,000 and £4,999.
- Competitive APR
- Quick approval process
- Borrow over a term of 1 to 7 years
- Slightly higher rate than best buy
Holiday loans between £5,000 and £7,499
joint best for low rate
Tesco Bank
Representative APR
7.1% (for Clubcard holders)
7.8% (no Clubcard)
Early Repayment Charges*
Yes
Borrowing term
1-5 years
Representative Example
Borrowing £5,000 at a representative APR of 7.1%, annual interest rate (fixed) 7.1%, will result in 60 monthly payments of £98.72. The total cost of credit is £923.20 and the total amount payable is £5,923.20.
Representative APR
7.1% (for Clubcard holders)
7.8% (no Clubcard)
Early Repayment Charges*
Yes
Borrowing term
1-5 years
Representative Example
Borrowing £5,000 at a representative APR of 7.1%, annual interest rate (fixed) 7.1%, will result in 60 monthly payments of £98.72. The total cost of credit is £923.20 and the total amount payable is £5,923.20.
This is a strong rate for a personal loan of this level. It comes with fixed repayments which you can choose to make over one to five years. You must have a Tesco Clubcard to get the 7.1% rate. Non cardholders are likely to get a representative rate of 7.8% APR.
- Competitive APR
- Unlimited overpayments
- Must be a Clubcard holder for the lowest rates
joint best for low rate
Santander
Representative APR
7.1%
Early repayment penalties*
Yes
Borrowing term
1-5 years
Representative Example
Borrowing £5,000 at a representative APR of 7.1%, annual interest rate (fixed) 7.1%, will result in 60 monthly payments of £98.72. The total cost of credit is £923.20 and the total amount payable is £5,923.20.
Representative APR
7.1%
Early repayment penalties*
Yes
Borrowing term
1-5 years
Representative Example
Borrowing £5,000 at a representative APR of 7.1%, annual interest rate (fixed) 7.1%, will result in 60 monthly payments of £98.72. The total cost of credit is £923.20 and the total amount payable is £5,923.20.
Santander offers great rates at this loan level. The bank offers loans from £1,000 to £25,000 (although the interest rates will vary). The loan term is one to five years. You’ll need to be at least 21 to apply and minimum income restrictions apply.
You can make overpayments on your loan, but full early repayment will incur a penalty fee.
- Competitive APR
- Borrow up to £25,000 (rates will vary on different loan sizes)
- Make overpayments
- Early repayment penalties
M&S Bank
Representative APR
7.2%
Early repayment penalties*
Yes
Borrowing term
1-7 years
Representative Example
Borrowing £5,000 at a representative APR of 7.2%, annual interest rate (fixed) 7.2%, will result in 60 monthly payments of £98.94. The total cost of credit is £936.40 and the total amount payable is £5,936.40.
Representative APR
7.2%
Early repayment penalties*
Yes
Borrowing term
1-7 years
Representative Example
Borrowing £5,000 at a representative APR of 7.2%, annual interest rate (fixed) 7.2%, will result in 60 monthly payments of £98.94. The total cost of credit is £936.40 and the total amount payable is £5,936.40.
M&S Bank is offering competitive loan rates for borrowing at this level. Loans can be taken over 1 to 7 years. You can make overpayments, but full early repayment will incur an early repayment penalty fee.
- Competitive APR
- Make overpayments
- Early repayment penalties
* Based on a settlement figure as set out under the Consumer Credit (Early Settlement) Regulations 2004. This states that if you have less than 12 months remaining of your loan, providers can charge up to 28 days’ interest. An extra 30 days’ interest can be added on if there is more than one year of the loan term remaining, taking the total maximum penalty to 58 days’ interest.
What's our methodology?
We looked at our pick of the best holiday loans based on borrowing of between £1,000 and £7,500 – a wide enough budget to cater for anything from a solo traveller, to a family holiday abroad.
To rank the deals, we looked primarily at representative APR but also considered borrowing terms, early repayment charges and late payment fees.
Finally, bear in mind that, while the holiday loan deals are correct at the time of publication and we’ll endeavour to update this page frequently, loan rates can change.
What is a holiday loan?
A holiday loan is essentially an unsecured personal loan. When you are asked the purpose of your loan during the application process, there is an option to select Holiday. This is for the lender’s own records and to check that a personal loan is the most suitable kind of borrowing. It shouldn’t affect whether you are accepted for the loan or not.
A personal loan allows you to choose how much you want to borrow (which could be between £1,000 and £25,000) and over how long. You then pay back that sum at a fixed rate of interest over an agreed term in a finite number of monthly instalments.
The duration of the personal loan (known as its ‘term’) is up to you – periods of 1 to 5 years are typical, but loan terms of up to 7 years are available. The longer the term, the lower the monthly payments will be. However, you’ll be paying interest for longer, so the total amount you pay over the term will be greater.
Personal holiday loans are ‘unsecured’. This means the debt is not secured against an asset, such as your home. This is different to a secured loan, such as a mortgage, where the lender could take your asset to recover its money if you miss payments.
What are the pros and cons of a holiday loan?
Taking out a holiday loan is a significant financial commitment and requires thought. To make things a little easier, here are the main pros and cons to consider:
Pros
- fixed payments are handy for budgeting
- choose the time you need to repay
- funds paid directly into your bank meaning any surplus can be put towards holiday spending
- you can often borrow more with a personal loan than a credit card or overdraft will allow
- many loan providers allow for penalty-free overpayments
- some very competitive rates available.
Cons
- the lowest rates on personal loans are for larger borrowing above £7,500
- the lowest-rate deals require a good or excellent credit score
- monthly payments are not flexible, like with a credit card
- personal loans charge interest which means paying back more than the ‘face cost’ of your holiday
- if you want to repay your loan early you’ll be charged one to two months’ interest depending on the term outstanding.
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