School’s out and things are heating up – now is the perfect time to start thinking about your summer travel plans. Whether you’re heading out on a camping excursion, planning a day of relaxation at the spa, or embarking on an exotic getaway, a personal loan is a great way to get the money you need for your vacation.
What’s the difference between a vacation loan and a personal loan?
You may have seen some lenders talk about “vacation loans.” Vacation loans are personal loans for vacation. The only real difference is that they are marketed specifically to travelers.
What are the benefits of a personal loan for vacation?
Personal loans are a smart alternative to payday loans or credit cards. The benefits of a personal loan, include:
- Fixed payments. World loans are installment loans, which means you make a fixed payment. Since you always know the date of your payment and the set amount due each month, repaying your loan is a breeze.
- Lower interest rates. Depending on your credit score, the interest rate on a personal loan is often lower than what you would pay if you charged your travel costs on a credit card. This saves you money in the long run, since more of your payment will be going to pay down your loan rather than just paying down interest.
Can I use a credit card instead?
Putting your vacation expenses on a credit card is another option for covering the costs of your trip. Let’s look at the pros and cons:
- Pro: Some credit cards allow you to rack up points or miles with each credit card purchase.
- Con: Those same credit cards can restrict the use of your points and miles to certain hotels and airlines, limiting your options. Plus, you must make credit card purchases prior to planning a trip to get your points – not much use to you when considering how to fund a trip.
- Pro: Having all your money for a trip on one card is convenient.
- Con: Not all locations will accept your credit card – or accept credit cards at all.
- Con: In new countries and unfamiliar situations, the risk of losing your card or encountering fraud is real.
- Con: Credit cards often come with hidden fees and high APR, adding to the cost of your vacation (without anything to show for it).
What can I use a personal loan for?
A personal loan can be used to pay for anything. From car repairs to major purchases, medical bills to pet expenses – and yes, even travel! Use your personal loan for vacation expenses including flights, hotels, meals, excursions, car rental and even souvenirs.
Is a personal loan the right way to get the money I need for my vacation?
Before you book your flight, let’s talk about budgeting. If you’re already struggling to save money or repay debts, it’s important to think through whether taking out a personal loan will be manageable for your situation. Missed payments can impact your credit score. Not to mention you run the risk of running up additional late fees and interest, which ultimately makes that trip a lot more expensive than intended.
As with any major purchase, it’s ideal to save up for your trip and embark on your dream adventure once it’s fully funded. That said, we know that isn’t always possible for every financial situation. You and your family want to make memories together, and you deserve to.
Here are a few additional things to consider when it comes to funding your trip:
- Start a travel fund and add to it each month. Even if you only budget a small amount of money each month, over time your savings will really add up.
- Shop around for the best deal. Check sites like Expedia, Orbitz, Travelocity and Kayak to compare prices on hotels, flights, car rentals and more.
- Check in on your credit report. Reviewing your full financial picture will help you make an educated decision about the best way to fund your vacation. If you have a low credit score, addressing any issues in your credit report before you apply for a personal loan increases your odds of approval.
- Compare lenders. Shop around to find a lender whose options work best for you.
Ready to learn more about World loans? Let us help you get the money you need to turn your dream vacation into a dream come true.
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