Finance for Fun: International Travel

With international borders opening, international holidays aren’t far behind and that means finance for fun.

We take a look.

At the time of writing, fully vaccinated Australians are exempt from travel restrictions, meaning they can leave Australia without applying for an exemption.

80% of eligible Australians over the age of 16 are fully vaccinated. That means around 17.2 million people can travel overseas.

Fully vaccinated Australians don’t have to quarantine when returning to Australia either. Of course, these rules are subject to change and can vary from state to state.

For the statistic-hungry, just 1.1 million passengers flew in or out of the country in the 2020/21 financial year, compared to 42 million in 2019. That’s a 97.4% decrease.

While many Australians love the idea of going overseas for a holiday, there are a few things to be aware of.

Other countries can change their rules
If another country experiences  a COVID outbreak, they may prevent passengers from boarding flights temporarily. This can mean more accommodation expenses as well as a host of other issues.

Additional testing
Travellers may be required to get COVID tests at short notice when abroad. This might mean changing plans suddenly.

Changes in rules
If Australia changes rules while someone is abroad on holiday, they may need to quarantine when they return.

Comprehensive travel insurance
Different policies cover different things but it’s always recommended to get comprehensive travel insurance which may cover additional accommodation, flights and non-COVID events.

Proof of vaccination
Travellers need documented proof of their fully vaccinated status. Typically, this is available as a digital certificate via Medicare through either myGov or the Medicare app.

There are two types of approved vaccines in Australia:

• Messenger RNA (mRNA) – Pfizer and Moderna
• Vector – AstraZeneca. 

Children under 12 can also enter and leave the country, regardless of their vaccination status – however, rules can change.

Make sure to check out smartraveller.gov.au’s advice on destinations to find out the latest news and COVID issues. 

New Zealand
Travelling across the ditch has always been popular with Australians and New Zealanders alike. Currently, fully vaccinated Aussies can move freely around New Zealand, providing they observe local laws.

Fiji
Fiji is open for Australian travellers. Qantas and Virgin Australia are resuming flights in December.

Japan
Some quarantining may still be required but, in most cases, it’s down from 10 days to 3. Note that there may be daily limits on arrivals too.

Thailand
As of November 1, fully vaccinated Australians only need to stay one night in a government-approved hotel while they wait for the results of a COVID test (administered upon arrival).

Singapore
If you’re fully vaccinated, you can travel to Singapore without having to quarantine on arrival. You must meet other criteria and apply for entry before departure.

Bali, the first place on many Aussie travel lists, is still a tough one. You’ll need to organise a visa in advance, have evidence of medical insurance coverage for COVID, quarantine at a hotel for 3 days and be fully vaccinated.

The UK, US and other countries that likely require transiting / changing planes are also a tough one as rules vary on where the transit takes place.

The UK, for example, updates a list of countries and territories useful for people planning to visit.

The good news for [fully vaccinated] Aussie travellers is that they can use a personal loan for international travel.

Similarly to pre-COVID times, loans for holidays can cover:

• Flights
• Accommodation
• Spending money
• Travel insurance

Depending on the applicant’s profile, some lenders may look into the itinerary and travel plans a little more thoroughly compared to pre-COVID times.

Applicants can borrow from as little as $5,000, with an applicant’s ability to repay the loan dictating their borrowing capacity (as a general rule of thumb).

Securing a personal loan to an asset a client owns, like a vehicle, is an option – this can help reduce loan rates and boost borrowing capacity. Some lenders may wish to delve into the loan purpose further for large lends for travel. 

Depending on the client’s profile, flight / itineraries are typically not required, however, a lender may ask for such details.

Loan terms range between 12 to 84 months depending on the lender and borrower requirements.

• BID (Best Interests Duty): make sure your client is fully aware of all details and that borrowing money to travel abroad meets their objectives, financial situation and needs.
• Responsible lending: your client’s situation should be able to support a trip overseas and make the loan repayments.
• Debt consolidation: some people may benefit from debt consolidation in addition to funds for travel.

Secured personal loans from 4.45%. Unsecured personal loans start from 5.95%.

Rates are heavily dependent on credit scores and applicant profiles.

Rates vary considerably so make sure to reach out to your Relationship Manager if you have any questions.

Usually, a signed privacy consent form, ID and financial documents are required. If an applicant opts for a secured loan, details of the asset are needed.

Ideally, a borrower looking for funds for overseas travel should be asset backed and have long-term employment stability.

They’ll also satisfy all government travel requirements, both in Australia and the countries they’re planning to visit.

It’s exciting to say the least – and it’s been a while. Friday, March 20, 2020, a date that doesn’t stir up good memories for many people, was when Australia closed its borders to the world.

International travel for most Australians has been a no-go since.

Prior to the pandemic, Australians spent over $60 billion on overseas travel per year – while over the pandemic? Well let’s just say, it’s not pretty.

With borders opening up, it’s expected that at least some of that money will filter back to international travel, starting with the Christmas period.