Cash-strapped families can now opt to pay off their trips over time. Picture:Yuganov Konstantin.

The lay-by system has been around for decades and has worked well for shoppers who wanted to secure clothing or furniture they could not afford to buy outright.

The world of travel will see a similar concept brought to bear by Hippo.co.za and Cape Town start-up Fomo Travel.

Lay-by travel, which is relatively new to South Africa, will enable travellers to pay towards their dream holiday destination up to two years before they leave - at no interest.

This means travellers won’t have to worry about paying off debt when they return from holiday as everything will be paid in full before the trip.

Vera Nagtegaal, the executive head of Hippo.co.za, said travellers would be able to decide to spend New Year’s Eve in New York, have a balmy beach day in Bali or go to any destination they desired without having to worry about paying for the trip upfront or swiping their credit card.

“Purchasing pricey items or experiences on a whim could have dire financial implications, so it’s not wise to fork out a large sum without proper planning and budgeting.

“Lay-by travel enables you to pay for your holiday in interest-free instalments,” she said.

Nagtegaal said the tough economy, the rise in the price of fuel and the increase in Value Added Tax from 14% to 15% made it hard for the average consumer to save money or travel.

She said many travellers resorted to using their credit cards to book holidays and had huge bills to pay when the interest accumulated.

“Lay-by travel helps people save on unnecessary spending. It is affordable and versatile.

“It allows travellers to compare and choose from a range of travel packages. People who would like to contribute to a travel package are welcome to do so.

“For instance, guests at a wedding can choose to pay off a couple’s honeymoon rather than get them a traditional gift or parents can pay towards their child’s graduation trip,” she said.

For further information, visit Hippo.co.za