SM Money: Life can be if you can a beach afford it

THOUSANDS of fed-up workers are leaving the rat race behind them and taking a year out to travel to foreign lands, explore exotic cultures or simply sit on a beach and relax.

Students often make the break either before, or immediately after, college, while others who have already started the grim world of full- time employment take the chance to get out of the miserable nine-to- five grind for more than the usual two weeks a year. But for those hoping to jet off for a trip of a lifetime there are a few hard financial questions to be answered first.

The main problem is raising the cash to fund the overseas adventure. The best plan is to do a few hard months, or even years, working and saving to ensure the flights and living expenses are looked after.

But if that is a difficulty there is always the option of taking out a loan and paying on return.

A Bank of Ireland personal loan allows people to borrow from pounds 1,000 to pounds 10,000 over up to five years. The fixed rate is currently 11.5 per cent APR and the variable rate is 12.0 per cent APR.

Meanwhile, its main competitor, the Allied Irish Bank, offers loans of up to pounds 10,000 and sometimes even more depending on personal circumstances. Interest rates are 10.67 per cent APR, or a fixed rate of 10.25 per cent.

However, bank managers will probably want to know what you plan to do when you return - and that you have a steady job lined up - before they hand over the money.

For those who are already settled with a mortgage there are a number of ways to break out of a lifetime of monthly repayments.

Many banks now offer "mortgage breaks" when the borrower does not have to make repayments for a few consecutive months.

When it's over, the repayments are readjusted so the mortgage can be paid off in the original time.

However, it is very unlikely that a bank or building society will grant a full year's leave on mortgage repayments.

The best bet is to let the property, which in the current housing shortage should not be a problem, and use the rent to keep up with the mortgage payments.

A third alternative is of course to sell the house and settle the bill with the lender.

Given the booming property market at the moment this might well also provide a bit of extra cash for the trip.

If there is a cash crisis when abroad, or an emergency which urgently requires extra funds, it is possible to get money wired to you.

Bank of Ireland's InterPay Express service can transfer money from Ireland to a foreign bank on the same day for a charge of pounds 40.

But if all the costs involved with organising a year off seem more hassle than its worth, it is good to know that for younger people a gap year can end up being financially rewarding in the long run by helping them to a better job.

A recent survey by the Association of Graduate Recruiters found that a year out, either before, during or after a university course helped prepare graduates for work.

"A lot of students are going straight from secondary school, through university and on to post-graduate courses," said Brendan Devine, business development officer for ETC Consultants.

"They come to us at 25 or 26, never having done a day's work in a real work environment and play catch up.

"If there was a choice between two candidates, I would choose the one that has shown innovation and practical savvy along the way. If they have got off their backsides and done something, that's the main thing," he said.HOW TO FINANCE A GAP YEAR

- The main problem is raising the cash to fund the overseas adventure:- The best plan is to do a few hard months, or even years, working and saving to ensure the flights and living expenses are looked after.

- A Bank of Ireland personal loan allows people to borrow from pounds 1,000 to pounds 10,000 over any term up to five years.

- The fixed rate is currently 11.5 per cent APR and the variable rate is 12.0 per cent APR.

- The Allied Irish Bank offers loans of up to pounds 10,000 and sometimes even more.

- Interest rates are 10.67 per cent APR, or a fixed rate of 10.25 per cent.

- Many banks now offer "mortgage breaks" when the borrower does not have to make repayments for a few consecutive months.

- You could let your property and use the rent to keep up with the mortgage payments.

- Or, you could decide to sell your house and settle the bill with the lender.

- If you run out of money abroad Bank of Ireland's InterPay Express service can transfer money from Ireland to a foreign bank on the same day for a charge of pounds 40.

Copyright 2000 MGN LTD
Provided by ProQuest Information and Learning Company. All rights Reserved.