If you’re looking for ways to fund your next vacation, this guide will help.
You can find numerous lenders across the US that offer travel loans designed for people who wish to go on vacations. You can use the money from these loans for any travel-related expense.
You could borrow up to $35,000 for a variety of purposes, with rates starting from 5.99%.
- Recommended Credit Score: 640 or higher
- Minimum Loan Amount: $2,000
- Maximum Loan Amount: $35,000
- Loan Term: 3 or 5 years
- Turnaround Time: 1-3 business days
- Simple online application process
- No prepayment penalties
How do personal loans for vacation work?
To qualify for any kind of vacation financing you’ll have to meet some basic eligibility criteria. While some lenders require applicants to have good creditworthiness, you can find vacation loans for bad credit as well. State regulations can have an effect on the kinds of travel loans you can get. For example, you cannot get payday loans in all states.
The kind of loan you choose and its duration will affect the maximum amount you can borrow. This also depends on the lender you work with, your credit score and your existing financial situation.
What are my vacation financing options?
Your options for a holiday loan include:
- Personal loans. If you have good or excellent creditworthiness you can apply for a personal loan through a bank or a credit union. The annual percentage rate (APR) for these loans is usually competitive, and some offer flexibility when making repayments.
- Auto title loans. With an auto title loan you use your vehicle’s title to secure the loan. Since you’re providing collateral, you don’t have to have perfect creditworthiness. However, your credit score can have an impact on the APR you get.
- Credit cards. Some people use their credit cards for spending while traveling, especially overseas. Using vacation credit cards makes sense if you plan to use features such as access to airport lounges, complimentary insurance cover and frequent flyer rewards. Don’t forget that you may have to pay foreign currency conversion fees as well as ongoing annual fees. Using your credit card for cash advances can see you paying a considerably high APR.
Personal loan providers that can fund that next trip
How do I find the best deal on a vacation loan?
When you’re looking for vacation financing, pay attention to these aspects:
- Interest rate. Whether you get a personal loan, a payday loan or an auto title loan you’ll have to pay interest. The APR can vary significantly even with the same kind of loans, so compare as many options as possible.
- Fees. A low interest rate might not help much if you end up paying a huge amount in fees. Before you accept any vacation loan’s contract find out how much you may have to pay for application fees, loan disbursement fees, late fees and NSF fees.
- Loan amount and term. A payday loan is typically a low-value short-term solution, whereas you can get higher amounts and longer terms through personal loans.
- Repayment flexibility. One reason why people seek vacation loans is to spread the costs over time. Making monthly payments for vacation loans is common. You can also find lenders that let you make weekly or fortnightly payments.
- Credit rating. Conventional lenders normally only accept applications from individuals who have good or excellent credit rating.
Mistakes to avoid
If you think you may have trouble repaying the loan on time you should avoid taking it in the first place. This is because not making timely repayments can have an adverse effect on your credit rating as well as your ability to borrow in the future.
Some people don’t go through the loan contract in detail, which can prove to be a costly mistake. This document gives you a clear picture of all associated fees and charges, telling you how much the loan may end up costing over time, so it’s worth spending time on.
Avoid overspending while on your vacation. If you spend more than you can afford on your credit card, the resulting debt will last long after the vacation is over.
Going on a cruise? 4 ways to pay for it
As cruises continue to increase in popularity, more people are looking to break the cost down. You have options when it comes to lowering the payments on your cruise to make it an affordable vacation.
- Cruise layaway plans. Many cruise companies, like Carnival and Princess Cruises, offer layaway plans that allow you to put down a deposit months in advance then pay in increments.
- Credit cards. Possibly the easiest way to pay for a large purchase, a credit card with a 0% introductory interest rate can get that cruise booked and paid for before you need to pay interest.
- Book in advance. Cruise companies that don’t offer layaway programs will still allow you to book in advance. This will save you money, and you’ll have more time to pay for your cruise.
- Go through a travel agency. Some travel agencies will offer a cruise-now-pay-later program that allow you to finance your vacation before you take it and pay for it once you get home.
Tips for making your next vacation more affordable
- Use a layaway program. These programs allow you to put a down payment on your trip in advance and pay off the rest of the cost in installments. It requires some planning in advance but doesn’t come with interest or fees.
- Crowdfund your trip. Set up a campaign on a crowdfunding site during the holiday season, around your birthday or any special event and ask for donations in lieu of gifts.
- Open a high-interest savings account and set up automatic transfers. This is a quick way to save up with minimal effort. If you deposit the equivalent of $2 a day, you’ll have $730 after a year — plus interest. It might not pay for a yearly vacation, but it can help cover costs and act as an emergency fund if you need to make an unexpected trip.
- Use an online piggy bank. Almost exactly the same as the previous option but with less work. Set a goal and the amount you want to contribute your high-interest savings account and forget about it.
- Get a credit card with travel rewards — and use it. Travel regularly? This could be your ticket to regular free flights. Bonus points if you can also use your credit card when you travel.
- Apply for a study abroad grant. Enrolling in a program abroad is a great way to travel and get to really understand a foreign country. You usually need to be a student to qualify but don’t expect to work hard — study abroad programs are designed to let you go have fun and experience a different culture.