Money for round the world trip

Hi,

I am planning a round the world trip (4/5 months) but I'm not sure what is the best way to finance it.

I have a car worth about €10,000, which is what I am budgeting my trip will cost. I also have a car/student loan of approx €15,0000.

My SSIA account matures next year and I should get about €10,000.

Should I
a) sell my car and use the proceeds and continue paying off the existing loan or
b) sell my car pay off the existing loan and rearrange a new one.
c) keep my car, get a new loan of €10,000 and pay it off with my SSiA

I'd imagine most contributors to this site would not recommend taking a loan out to go on holiday.

Will you need a car immediatly when you return home?
Do you have a job lined up when you return?
The answers to those questions will determine if you need to keep the car, and if you'll be able to pay your living expenses when you return.

I would (reluctantly) go with option b, paying off the 'holiday' loan with the SSIA when it matures. Personally, I would wait until the SSIA matured, sell the car, pay off the loan and use the SSIA to finance the trip. But that would mean waiting until next year which may not suit you.

Enjoy the travelling...you'll have a blast either way.

I don't need a car right away when I get back and I have a job lined up.
It would be nice to wait unitil my SSIA matures, however I'm going with a friend that has just finished college so the timing is right for her. If I wait I probably won't have someone to travel with.

GOR said:

b) sell my car pay off the existing loan and rearrange a new one.

Click to expand...

Why do this? Can you get a better rate or are you looking to lower the repayments by extending the term? All you will be doing otherwise is unnecessarily paying extra arrangement fees to replace one loan with another.

What about...

Sell car, get 10k cash from it
Go to bank, rearrange loan to have lowest possible payments on outstanding loan for period you are away. Put enough money (maybe 1k) in an account for the standing orders to be paid on time.

Use extra car cash to go on hol.
When come back pump loan payments back up to original level, and/or pay off a lump of it with ssia money, or buy another car with the ssia money and keep paying back loan at old schedule...

You're actually in positive enough a situation

+ 10k car, when you lose it
- 15k loan
+ 10k ssia

is the car loan secured against the car ?