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.
Prosper Personal Loans
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.
Options you have for a vacation loan
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.
- Payday loans. You can apply for a payday loan if you have poor or bad credit, provided you can demonstrate an ability to repay the money you want to borrow. Payday loans tend to attract higher APRs compared to personal loans.
- 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 loans you can apply for
How you can compare your holiday finance options
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.
Is there anything you should avoid about vacation loans?
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.
Fast comparison of travel insurance cover with detailed reviews
Still have questions about vacation loans?
How quickly can I apply for a travel loan?
If you have all the required information close at hand you can complete an online application in a matter of minutes.
Can I use proceeds from vacation financing to go on an overseas holiday?
Yes, you can go wherever you want to (provided you have sufficient funds). Vacation loans aren’t linked to specific destinations.
Do I have to pay any penalty if a repay my loan ahead of time?
This depends on the lender you’re working with, so you should check before applying.