The winter chill has arrived. For many Australians, that can only mean one thing: the travel itch is setting in again.
As the urge to escape grows, some are making bold—and potentially costly—decisions to chase the sun.
The $50,000 question: Is it worth it?
Let’s be honest—$50,000 is an eye-watering sum to spend on a holiday.
Yet, according to finance experts and online chatter, it is not as far-fetched as it sounds.
One user on social media, Brooklyn, was shocked to learn that some people are taking out personal loans equivalent to a house deposit to fund their European holidays.
‘Is this genuinely something people are doing?’ she asked, explaining she had budgeted $16,000 for a 10-week trip for two.
It appears they are. And it’s not just a fringe few.
Data from Finder reveals that in July 2024 alone, Australians were approved for $59 million in personal loans for travel.
That’s a sharp rise from the $35 million borrowed in January 2020, underscoring just how strong the post-pandemic travel urge has become.
The hidden cost of holiday debt
So, what’s the harm in borrowing for a much-needed break? According to tax expert Kiki, quite a bit.
‘It’s a bit risky taking out a loan, especially in this environment where the banks are quite strict with borrowing capacity,’ she says.
‘Taking out a personal loan of $50,000 will definitely impact your borrowing capacity.’
In other words, if you are hoping to buy a home in the near future, that holiday loan could haunt your application.
Lenders assess your overall debt when determining how much you can borrow for a mortgage.
A large personal loan could flag you as a financial risk, potentially leading to a declined application. But home ownership is not the only concern.
Personal finance expert Sarah Megginson notes, ‘A growing number of Australians are drowning in debt to be able to travel. While it’s tempting to splurge on a holiday, taking out credit to do so can cause long-term financial consequences and keep you stuck paying off debt for months or even years.’
Keeping up with the jet-setting Joneses
Why are so many prepared to take on debt for a trip? Social expectations may have something to do with it.
Finder’s research shows that more than 2.14 million Australians would go into debt to pay for their holidays, and over one million feel pressured to plan trips they cannot truly afford.
It’s understandable. Social media is filled with picture-perfect snaps of friends sipping Aperol spritzes in Rome or hiking the Alps.
But as Kiki notes, ‘People just don’t realise the impact it has on them when they come back from the holiday, which is the concerning part.’
Credit cards vs personal loans: Is there a better option?
Some argue that credit cards might be preferable to personal loans when it comes to funding a holiday.
With credit cards, travellers can earn frequent flyer points, benefit from built-in travel insurance, and potentially avoid interest charges if they pay off the balance in full.
Still, both options come with high interest rates. Even the better deals hover around five to 10 per cent, while some cards and loans can top 20 per cent.
Regardless of the method, debt will outlast your time away—and that’s the real cost.
The bottom line: Is debt-funded travel ever worth it?
Some say, ‘Life is short—travel while you can.’ While there’s value in making memories, it’s vital to consider the long-term consequences.
As Kiki advises, ‘If you want to go on a holiday, then save for it, and then you won’t have to stress about the aftermath of coming back and having to deal with this loan that is probably anywhere between two to five years of repayments.’
The financial—and emotional—burden of lingering debt can easily outweigh the short-lived joy of the trip.
Your turn: Would you borrow for a holiday?
Have you ever taken out a loan to fund a holiday? Did it turn out to be worth it—or something you regretted? What are your tips for making dream travel possible without going into debt?
We invite you to share your experience or advice in the comments below—your insights could help others make smarter travel choices.
Also read: Australians say goodbye to US travel—find out where they’re going instead
