How to finance a holiday from the workforce?

I am about to take a small break from the workforce. I have resigned already, finish going to work at the end of November and then on one months holiday until my resignation date at the end of December.

Hubby would like me to take up to 12 months off. But how to finance the loans?? What would you suggest?? We have plenty of equity. We also have a little nest egg for emergencies, but don’t feel this is an emergency so don’t want to touch it. I am sure I will go back to work in February, but if nothing comes up that I am interested in/or nobody wants me I would like life to go on as if I had an income. I don’t want to compromise my lifestyle in any way.

Should I take out a home equity loan and say it is for investment purposes? Or is there a better way? There is a lot of chatter on here about LOC. Would this be an option? I am not at all familiar with these as have always just taken out loans.

Anyway, before my payslips run out I would like to set something up so the bank is none the wiser that I am soon to be unemployed. I would appreciate your thoughts on the best avenue for me.

Kinga
 
You could probably set up a LOC while you still have payslips and can prove serviceability.

Friends did this just before they retired - in the end they never drew down on it but were happy to have it there in case they needed it.
Marg
 
A lot (most) lenders will want a payslip that is no more then 5 weeks old. So something to think about, however the lenders will do an employment check.

Regards,
 
So you would set up the LOC before you quit, and use the most current payslips would you not, well those without lump sum payout of holidys or something maybe, wouldn't you?
 
In theory are they just like an overdraft?? You only pay interest if you draw on them?

I've never had one but I believe that is how they work. There may be an annual fee for having the facility.
Marg
 
Most times yes they will ring and obtain the number from the white or yellow pages, they won't use the number on the application form.

Homeside will take the PAYG summary (need to confirm this) and don't ring the employer, Homeside is part of NAB.

Regards,
 
A LOC is like a big Credit Card, you pay (in most cases) an account keeping fee but only pay interest on the loan if its drawn down.

Regards,
 
I am currently paid monthly - so two payslips to go. All of December will be annual leave, which cleans me out of holidays, so no lump sum to pay.

I currently run my loans through a Pro pack with my bank. The Bank Manager knows me well. So well that I do not attend any formal bank meetings. Everything is done on the phone and then I pick up paperwork, sign it and return it. I have not seen him professionally for about the last 3 loans.

I think I need to apply this month for whatever will be the best way to go eg LOC and then I still have a month up my sleeve.

Kinga
 
I have a preferance for a TERM loan with redraw or offset over LOC in the current environment for purposes like yours.

You dont need to be able to cap interest, so you dont need the risk of some of the "repayable" on demand clauses that some loc products have

ta
rolf
 
Thanks Rolf

My first thoughts were to take out an equity loan with an offset a/c. Will only use if I need it. But thought I would put it out to the good folk as SS to make sure there was not a better way.

Thanks everyone for your suggestions.

Kinga
 
I have a preferance for a TERM loan with redraw or offset over LOC in the current environment for purposes like yours.

You dont need to be able to cap interest, so you dont need the risk of some of the "repayable" on demand clauses that some loc products have

ta
rolf
never heard of TERM loan before, could you please explain, is it borrowed against property ?
 
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