Vacation Loans: Your Guide to Travel Financing

Vacation Loans: Your Guide to Travel Financing

Kerry Vetter
by Kerry Vetter
Updated: July 15, 2022

Have you ever wondered when you last enjoyed a vacation? When did you enjoy the pleasure of doing nothing and sunbathing or sitting late in the morning with a cup of coffee on a quiet terrace?

Table of Contents

What is a Vacation Financing?
How to Finance a Vacation?
Why Use Personal Loan for Vacation Financing?
How Does a Travel Loan Work?
Vacation Loans for Bad Credit Score
How to Get a Vacation Loan?
Frequently Asked Questions

Maybe you are watching TV or spending your time on Instagram when an advertisement for an idyllic vacation spot appears on the screen. It’s a beach paradise, a jungle paradise, a mountain getaway, or a cruise ship full of people having fun. Or maybe you’re just thinking about the last mini trip you went on a long time ago. You stop for a few seconds and think, “Wouldn’t it be great to have a vacation for my family and me?”

But what to do if you don’t have enough money to finance all these pleasures? Borrowing from friends or even family members for taking them on vacation sounds stupid. Well, what are your options for financing a break and living the moment on your budget?

What is a Vacation Financing?

Vacation financing, namely, a vacation loan, is a short-term or medium-term personal loan product you borrow from financial institutions. In simple words, you get your money now, go on vacation, then come back and repay the personal loan debt with a lump sum or fixed monthly installments.

Vacation loans have become so popular among Americans that you can’t miss them. However, these loans are subject to credit approval and sufficient investor commitment before they are provided. Together with multiple lenders, many tourism agencies provide such opportunities for people who want finance a travel and discover the world. The available loan amounts range between $500 and $15,000. Just make sure that you qualify with the minimum individual annual income.

How to Finance a Vacation?

how to finance vacation

Americans who want to go on vacation have several options to finance their travel plans. 1FirstCashAdvance has picked up three options that you may choose when choosing a travel financing:

Credit Card with Zero APR

Almost all Americans have such credit card. The annual percentage rate (APR) is the cost of credit as a yearly rate. It shows both your interest rate and an origination fee. They borrow money to pay for different goods and services than repay the credit card debt on the next paycheck. The advantage is that you have zero interest rates on this credit card. Important note: keep the balance on zero or above to avoid paying interest. People with good credit history will have a larger credit limit compared to those with bad credit scores.

Travel Bonuses

Many tourism agencies provide travel financing plans for those who want to have a pleasant vacation, be it in the US or worldwide. You can choose a certain destination offer, and its budget. Then you are free to discuss the personal loan for travel. Usually, customers get the whole vacation loan amount (up to $5,000), or borrow only a specific amount to cover certain services. Typically, the minimum loan amount is $1,000. It is up to you what to choose and where to go.

Unsecured personal loans for vacation

One of the easiest way to cover all the travel expenses is to get an unsecured personal loan. Usually, personal loans specifically for vacation with monthly payments are secured, depending on the amount you need. But there are some lenders that allow you to borrow unsecured loan up to $15,000. But the minimum loan amount is $5,000.

One condition: unsecured loans are more expensive compared to secured one because they don’t check your debt to income ratio and debt payment obligations. Plus, some loan providers could charge an origination fee or prepayment fees. Origination fee ranges from 3% to 6% of the loan amount you borrowed.

To secure it, you may use a vehicle, real estate, valuable object or you may get a co-signer. Usually, a personal loan is used to fund education related expenses, but most Americans use the money to go on vacation. Sometimes, not all applicants qualify for larger amounts. That is why you should be completely informed before borrowing an unsecured loan.

Why Use Personal Loan for Vacation Financing?

personal loans for vacation

Before taking a personal loan with fixed monthly payments, try to assess all the advantages and drawbacks of such a loan product. Take your time and check these points below:

Pros of a Vacation Loan

  • Quick loan approval decision and direct deposit within business day;
  • Flexibility in repayment loan terms;
  • Lower interest rate, no origination fees.

Cond of a Travel Loan

  • Sometimes paying for experience, not for goods or services;
  • Additional charges for providing funds (prepayment penalties).

If you can’t afford the drawbacks, try to search for reliable lenders who are ready to provide you cheap personal loans for vacation under reasonable interest rates and fixed monthly payments.

How Does a Travel Loan Work?

Vacation loans work as simple as an installment loan you get with a certain repayment loan term. The lender transfers the vacation loan within business day after you sign the loan agreement. You receive the money, spend them as you wish. Then every month, the loan provider withdraws the monthly debt amount from your bank account till the loan closing. If you choose to make the monthly payment offline and delay it for several days, you just pay interest rate for these days.

While applying, you may get an estimated monthly payment. So, before signing the loan contract, you could assess your financial possibilities, qualifying debt, and see if you can afford paying monthly installments.

Vacation Loans for Bad Credit Score

Bad credit score is a qute widespread issue among Americans that can’t repay their loan debts on time. However, some lenders created special financial products for such borrowers. They charge you no loan origination fee. Usually, the available bad credit small minimum loan amounts range from $500 to $1,000.

If you are among those who have some small late payments, and still need money, don’t get upset. You are yet eligible for such personal loans with monthly payments. But learn that travel loans for bad credit score are slightly more expensive compared for those with fair credit history.

A bad credit vacation loan will help you pay for travel expenses within several days. You’ll get your funds now and repay them later with a certain interest rate charges by your lending entity.
John C. Tolleson, the Executive Chairman at Tolleson Wealth Management, says that credit repair companies can make this process easier by doing the heavy lifting for you — obtaining your reports, finding inaccuracies and disputing any mistakes directly with creditors and the major credit bureaus. It could a nice advice for those who can’t repair the credit score on their own.

Note: if you want to check your credit score for free, access AnnualCreditReport.com. An annual free credit score check is available for every American citizen.

How to Get a Vacation Loan?

loans for vacation

People can get personal loans for travel by applying at the direct lender’s office, tourism agency or you can fill in the loan application form on our website. It is online and completely free. Why? Because 1FirstCashAdvance just connects you with thousands of loan providers available online. 95% of them are ready to work with borrowers who have a bad credit score.

Our network of lending partners has a high credit approval rate and you can get a pre-approval within several minutes. Plus, they don’t have a prepayment penalty. So you can pay off your loan early and save money on interest. Get your money today and go on vacation tomorrow! Have you packed your bags yet? What are you waiting for? Choose the sum among available loan amounts, then select your schedule among loan payment terms and submit it.

Frequently Asked Questions

  1. How much does it cost?

    A vacation loan has different costs, depending on the amount you borrow and loan term lengths you choose. If you get from $100 to $1,000, you pay $10 – $30 for every $100 borrowed. It is called a payday loan, because the repayment term doesn’t exceed 30 days. Also, there maybe a small origination fee that depends on the lender. Borrowers with thin credit histories may be charge with higher rates compared to others.

    If you need more money, try installment personal loans with medium loan terms (up to 12 – 24 months) and fixed rate loan payments. The maximum loan amount you may borrow is $5,000. This loan product is cheaper than payday loans and it will cost you up to $80 for every $1,000.

  2. How far in advance should I apply for a vacation loan?

    It depends on the cut-off times of online lenders. Some of them will need several days between loan acceptance and money funding, according to federal law. But our direct lenders might make a direct deposit by the end of the day you applied. You can go on vacation tomorrow if you apply today before 10:00AM. But if you apply before noon, you may get your cash within one business day.

  3. What are the best vacation loans with no credit check?

    Vacation loans with no credit check suit perfect for people with bad credit score. The best vacation loans are those that don’t require hard credit verifications through major credit reporting bureaus. 1FirstCashAdvance recommends you to compare loan offers and search for a lender that performs only soft credit checks through alternative credit companies. These checks won’t affect your credit score at all and you’ll be able to take larger loan products in the future.

    If you want to file a complaint about loan proceeds, contact Department of Financial Protection & Innovation.

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Kerry Vetter is a consumer finance expert and writer, who has been engaged in creating finance-related content for more than ten years. Her expertise is approved by obtaining a Bachelor of Science in Finance from Boston College, as well as receiving three major certificates as a professional advisor and counselor.  At the moment, Kerry is an author of multiple educational articles and insights that have been created in order to increase and develop financial literacy and responsible borrowing among US citizens. Her expert relevant savings advice has helped a lot of people overcome their financial issues and find out more about principles of smart spending, the right investment decisions, and budgeting.  You can read more about Kerry’s professional background here.

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