A vacation loan is a type of personal loan that you can use to fund your next vacation. Such loans are a great way to help you pay for unexpected costs, like travel insurance or a new passport, while still enjoying your time off.
When you apply for a vacation loan, you'll need to provide information about your income and how much money you want to borrow. Then, you can choose the monthly payments you wish to make (usually between 2 and 4). You may also be asked about your credit score and employment history.
Rates and terms of vacation loans
There are no set rates or terms for vacation loans. Instead, you will depend on the lender's policies, credit score, and income level. Lenders offer variable rates ranging from 6%–22%, depending on your credit score and income level. Lenders also charge origination fees between 1%–5% of the total loan amount.
Vacation loans are typically unsecured loans, meaning that you don't have to use collateral like a house or car to borrow the money. It makes them a great option if you have little to no credit history, as well as for people who may not be able to get other types of loans due to their poor credit scores.
Vacation loans are also outstanding because they are usually relatively easy and quick to get approved for. You can generally apply online and receive an answer within minutes. If approved, you'll have access to your money within 24 hours!
Where can you find a vacation loan?
When planning your next vacation, you might wonder where to find a vacation loan. Luckily, there are plenty of options for getting the funds you need for your trip! Here are some of our favorites:
A credit card with an introductory interest rate that you can pay off over time! This way, even if you don't have any money saved up, you can still get the money you need to go on vacation and pay it back as soon as possible.
The bank or a direct lender! If you already have an account and have been saving up, this might be the best option. Just make sure they'll give you enough of a loan at a low enough interest rate, so it's worth it—it's always good to shop around first!
Your parents! If your parents are willing to help with some cash for your trip (or even just part of it), this could be an excellent option for both of you. After all, what better way is there to spend time together than bonding over adventure?