Holiday travel loans on rise
More than 300,000 Norwegians are going to spend money they don’t have on holidays
More than 300,000 Norwegians have plans to borrow money for this year’s summer holiday, and 180,000 have not yet paid off last year’s holiday.
“More than 300,000, with open eyes, will take a vacation with money they do not have. The holiday is not surprising. It comes every single year,” said consumer economist Magne Gundersen of Sparebank1.
According to the survey, which is carried out by Respons Analysis for the bank, nine out of 10 believe that they do not need to borrow money for this year’s summer holiday. Still, 2% responded that they must take their holiday on credit or borrowed money, while 6% said they may need it.
This means that there are 310,000 Norwegians nationwide who may take their vacation on credit or borrowed money.
This is especially true for young people between the ages of 25 and 34, who are often in the establishment phase.
Gundersen believes it is sad that some choose a more expensive holiday than they can afford. Gundersen said that most people pay back at maturity, but he believes it is worrying that 31% responded that they do not know when the money will be repaid.
This means that 100,000 have plans to take a vacation on credit without laying a plan for how the holiday will be paid later.
“It is incredibly stupid and is an attitude you encounter in the luxury trap. Living and spending money now because you get a consumer loan, without thinking about when to repay is the beginning of the evil economic spiral. Then you can spend a long time paying back, and in the long run it can be the most expensive holiday you have ever had.” he said.
“It should flash a couple of red lights if you realize that you cannot pay off the loan you have incurred,” said Gundersen.
Even though the majority pay at maturity, there are many who are struggling to pay off the holiday’s goods and experiences. According to the survey, there are 180,000 Norwegians who have not yet paid off last year’s holiday. Some 47,000 do not have an overview of whether the holiday has been paid off.
The message is clear to anyone who chooses a holiday funded by borrowed money: “Pay back quickly. Once you have paid back, save for the next vacation. You come a long way with a small sum per month, in addition to the holiday pay. Then you will not have to use borrowed money next year. And if you can’t afford the holiday, you should lower your holiday ambitions.”
This article was originally published on Norway Today.
This article originally appeared in the July 26, 2019, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.