4.9 Stars - Based on 225 User Reviews

Is a Vacation Loan Right for You?

small family on vacation standing on beach

You have the dream trip in mind, but if you’re like millions of Americans, that price tag may seem out of reach. Should you put it on your credit cards or apply for a personal loan? Let’s take a look at the pros and cons of a vacation loan.

What is a Vacation Loan?

Also known as a travel loan, this is exactly what it sounds like: it’s taken out to fund a vacation. These funds can be used for every aspect of the trip including airfare, food and drink, and hotel accommodations. Many people don’t have money set aside for these occasions and think they’re out of reach.

Your dream vacation may involve a honeymoon, an exclusive couples retreat, a cruise, a celebration, a family trip, or just the need to get away and relax. If you have something in mind but don’t have the money set aside for it, a loan may be the perfect answer for you.

The Pros of a Vacation Loan

You may be weighing your options for your trip. Put it all on credit cards, take out a loan, or wait for your financial situation to change before booking. Since your financial situation is always changing and emergencies will always arise to wipe out your reserves, waiting for “the right time” may mean never going at all. A personal loan is a way to ensure your vacation happens when you need it the most. There are many great reasons to take one out.

1. Leave the Credit Cards Behind

You won’t need to charge the trip to your cards, leaving larger available credit available for routine or emergency purchases. You won’t be maxing them out, which means no “ding” to your credit score. Take one credit card on the trip for emergencies, and leave the rest at home.

2. Customized Loan Options

Even if you saved all year for your vacation, you may find you don’t have enough to turn the dream into a reality. Whether you’ve pre-planned or are looking for a spontaneous getaway, you can apply for the amount you need to ensure the excursion is fully paid for. Borrow only as much as you need to make up the difference, or borrow the entire amount. It’s entirely up to you.

3. No Savings Required

It’s hard enough to make ends meet without struggling to put aside extra money throughout the year for your trip. A vacation loan won’t tap into your savings or require you to set money aside from your paycheck.

4. The Money Can Be Used for Other Things

Getting a loan doesn’t mean you have to spend every dollar on the trip. You can borrow enough to pay down some debt or make a large purchase while also funding your travel plans. 

5. Lower Interest Rates

Credit cards charge you up to 20% or more for purchases. A vacation loan will save you thousands of dollars in interest charges by offering lower rates than credit cards. This means you can pay the money much faster and for far less.

6. Fixed Terms

Loans have very specific payment terms, including set start and finish dates and fixed monthly payments. This means a predictable payment schedule with an end in sight. Many people who charge trips to a credit card choose to pay only the minimum amount each month, resulting in more interest payments and an extended payback time. 

Is a Vacation Loan Right for You?

There may be times when getting a loan isn’t the best idea. Here are a few considerations to keep in mind before signing the dotted line.

1. Can You Afford the Monthly Payments?

Keep in mind that a loan is just that…a temporary advance of money for an express purpose. While you’ll ultimately save money, you should be aware of adding more expenses and payments to your monthly budget. 

2. Will You Qualify?

To get the best rates for a personal loan with most lenders, your credit score needs to be “good” or better. Some lenders, like Bay Country Financial Services, specialize in funding for borrowers with lower credit scores and will be more likely to fund the loan. Repeated inquiries will lower your score, making it even harder to get funding. If your credit is less than perfect, find a lender that works specifically for borrowers in your situation.

3. What About Interest?

While obtaining a loan will mean lower interest rates than charging your trip on your cards, you’ll still be paying interest on the amount borrowed. In addition, many lenders add extra fees for the process, increasing the amount you owe. Keep these expenses in mind when planning your trip.

4. When Will Funding Be Available?

Some lenders can take weeks to finalize your loan. Others, like us, feature same-day approval and can have the money in your hands within a day.

5. How Much Will You Qualify For?

Taking out a vacation loan may not make a lot of sense if you can’t fund the entire trip with it. Some lenders may limit the lending amount, while others offer up to $50k in funding for qualified buyers with no limits on how you spend the money.

Bay Country Financial Services Vacation Loans

Bay Country Financial Services offers vacation loans for a wide range of credit scores, including fair or poor scores. We offer same-day approvals and up to $50,000 in funds. We don’t believe in tacking on additional charges like application fees, and our interest rates are competitive. Contact us now for your options, and hit the road with confidence. Your dream getaway is waiting!