Dreaming of an overseas getaway or an all-American road trip? A travel loan could help you reach your destination. Keep reading to find out how.
What is a travel loan?
A travel loan is usually just an unsecured personal loan that helps finance your vacation or other type of trip when you can’t or don’t want to pay for all of your expenses upfront. With an unsecured loan, you don’t have to use any collateral, like your house or your car, in order to get the loan. If you choose a secured personal loan for your trip, you would risk losing the property used as collateral if you defaulted on the loan.
Since a travel loan is taken out as a personal loan, you can use the funds for many purposes. For instance, you can book a flight, reserve a hotel room, and pay for your meals and sightseeing while you’re away.
When is a travel loan a good idea?
Taking on any type of debt is an extremely personal decision, and the right answer depends on you. But you can still use a few guidelines to determine if a travel loan is a smart choice. The biggest deciding factor should be whether or not you can afford the monthly payments while meeting your other financial obligations.
Also make sure you’re prepared for any kind of emergency that may pop up in other areas of your life, like a trip to the ER or major car repairs. If you can handle your new payments and a financial emergency, then a loan may be right for your next trip.
A loan could also help you get a good deal on early bird specials. For example, maybe you’re setting aside cash each month in your vacation fund, but you can get a great price on a flight if you book right now.
What are the advantages and disadvantages of travel loans?
Before you request a travel loan, make sure you understand how it can affect you both positively and negatively. If you have bad credit, making on-time payments through an installment loan could help boost your credit score over time. And in some cases, loans are counted more favorably than credit card debt and often come with lower interest rates. Finally, funding for a loan can be quick. If you’re wondering, “Where can I get a travel loan near me?” you don’t have to go to your local bank, you can simply request one online. LendGenius is not a lender but we provide a simple form that can connect you with a lender in minutes.
The biggest downside to getting a travel loan is taking on debt for a non-necessity. Make sure that you’re not putting yourself in a financially vulnerable position. Also carefully read your loan agreement so you understand all of the fine print, particularly fees you’ll be charged. An origination fee, for example, is typically taken out of the loan funds before they’re deposited into your account, so you may not receive as much as you thought.
All aspects of a big trip require planning, and how to finance it is no difference. Explore your choices well in advance so you can make a smart choice that works for your wallet.
Disclaimer: This is not legal or financial advice. Please consult a legal or financial advisor for your specific situation.