Finance your vacation

When you're ready to head out on vacation, use these tips to help make your trip more affordable.

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Have the chance to go on a once-in-a-lifetime trip? A loan can be a more affordable way to pay for help you cover the cost than putting it on a credit card. But be careful. Not every vacation is worth financing. You might be better off saving up for your next big adventure.

Our top pick: LendingClub

  • Min. Credit Score Required: 640
  • Max. Loan Amount: $40,000
  • APR: 6.95% to 35.89%
  • Requirements: US citizen or permanent resident, verifiable bank account, steady source of income, ages 18+.
  • Less strict eligibility requirements
  • Get funds in just a few days
  • High Trustpilot rating

Our top pick: LendingClub

A peer-to-peer lender offering fair rates based on your credit score.

  • Min. Credit Score Required: 640
  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $40,000
  • APR: 6.95% to 35.89%
  • Requirements: US citizen or permanent resident, verifiable bank account, steady source of income, ages 18+.

What is vacation financing?

Vacation financing is generally the combination of your savings, a loan and a credit card. If you don’t have the savings built up and don’t want to spend a lot of money using a credit card, then a personal loan will likely be a good option to get you booked for your next trip.

The type of vacation financing you’ll qualify for will depend on your credit, financial background and the amount you need to borrow.

Should I take out a loan to go on vacation?

Realistically? Probably not. Most financial advisors are against using a loan of any type — including credit cards — to pay for a vacation. Vacations are a luxury, and going into debt to pay for one may not be a wise decision. You’ll be stuck with monthly payments, and at the end of the day, you’ll pay hundreds or even thousands of dollars more in interest than you would have if you’d saved for your vacation instead.

Loans vs. credit cards

If you must borrow, financing your vacation with a personal loan is often a better choice than a credit card, which typically comes with higher interest rates. Personal loans also offer fixed payments and set terms that make your repayments more structured. When you borrow, you know exactly how much that vacation will cost you for years to come.

Financing a once-in-a-lifetime vacation may not be the worst financial decision, but you should have a health amount of savings built up in addition to your loan before setting off for your destination.

How can I finance my vacation?

When you’re ready to take a vacation, there are a few different financing options you should consider.

What personal loan lenders can fund my next trip?

Updated March 29th, 2020
Name Product Filter Values APR Min. Credit Score Max. Loan Amount
Credible Personal Loans
3.99% to 35.99%
Fair to excellent credit
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Fiona Personal Loans
4.99% to 35.99%
Good to excellent credit
Get loan offers from multiple lenders at once without affecting your credit score.
Monevo Personal Loans
3.49% to 35.99%
Quickly compare multiple online lenders with competitive rates depending on your credit.
Even Financial Personal Loans
4.99% to 35.99%
Get connected to competitive loan offers instantly from top online consumer lenders.
Upgrade Personal Loans
6.98% to 35.89%
Affordable loans with two simple repayment terms and no prepayment penalties.
PenFed Credit Union Personal Loans
6.49% to 17.99%
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi Personal Loans
5.99% to 18.64%
A highly-rated lender with competitive rates, high loan amounts and no fees.

Compare up to 4 providers

7 tips for making your next vacation more affordable

  1. Use a layaway program. Layaway programs aren’t just for pre-Christmas sales. Many travel deals can be put on layaway, and unlike some other financing options, you won’t pay interest or fees.
  2. 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 instead of gifts.
  3. Put money into a high-interest savings account. Savings accounts are 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.
  4. Use an online piggy bank. Online piggy banks are similar to savings accounts, but they’re often less work. You set a goal and the amount you want to contribute to your account then forget about it.
  5. Have a budget. While you’re busy putting away money into your savings, take the time to create a travel budget. Money for food, tours and entrance fees should all be added on top of transportation costs like flights and car rentals.
  6. Get a credit card with travel rewards. There are a number of credit cards with travel rewards for you to choose from. Use it to pay for your everyday expenses, pay your bill early to avoid interest charges and build up a tidy amount of travel rewards.
  7. Apply for a study abroad grant. Enrolling in a program abroad is a great way to travel and really get to understand a foreign country. This is a great option for students looking to travel but unable to build savings or qualify for a loan or credit card.

4 ways to pay for a cruise

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.

Watch out for these mistakes when financing a vacation

Because financing your vacation can be expensive, be on the lookout for red flags when you’re searching for a loan.

  • Unaffordable monthly payments.If you think you pay have trouble paying your loan, don’t take one out. Missed payments can have an adverse affect on your credit score, and that can make it much harder to borrow in the future.
  • Skimming your loan contract. A loan isn’t the right place to skim terms and conditions. Your loan contract will tell you exactly what you’ll be spending and what happens if you default — important information when you’re borrowing a large chunk of change.
  • Overspending on your credit card. Credit card debt comes with a high interest rate and rigid fees. If you borrow too much, you could damage your credit utilization ratio and pay enough money for another vacation — for the credit card company.

Bottom line

Finding the right vacation financing could be an important step in planning your next big trip. There are multiple ways to make a vacation more affordable, but stay thrifty. Borrowing too much could make it more difficult to travel in the future. Always compare your loan rates and have a healthy amount of money saved to finance your vacation interest-free.

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